To address rising college tuition by strengthening the compact between the States, the Federal Government, and institutions of higher education to make college more affordable.

November 19, 2003

Mr. TIERNEY (for himself, Ms. MCCOLLUM, Mr. GEORGE MILLER of California, Mr. KILDEE, Mr. OWENS, Mr. PAYNE, Mr. ANDREWS, Ms. WOOLSEY, Mr. HINOJOSA, Mrs. MCCARTHY of New York, Mr. KUCINICH, Mr. WU, Mr. HOLT, Mr. DAVIS of Illinois, Mr. CASE, Mr. GRIJALVA, Mr. VAN HOLLEN, Mr. RYAN of Ohio, Mr. BISHOP of New York, Mr. EMANUEL, and Ms. PELOSI) introduced the following bill; which was referred to the Committee on Education and the Workforce

To address rising college tuition by strengthening the compact between the States, the Federal Government, and institutions of higher education to make college more affordable.

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 `College Affordability and Accountability Act'.

(b) TABLE OF CONTENTS-

Sec. 1. Short title; table of contents.

Sec. 2. References; effective date.

Sec. 3. Findings.

Sec. 4. State commitment to affordable college education.

Sec. 5. Cost containment strategies.

Sec. 6. Pell Plus.

Sec. 7. Cooperative education rewards for institutions that restrain tuition increases.

Sec. 8. Study.

Sec. 9. Articulation agreement demonstration program.

Sec. 10. Advisory Committee on Student Financial Assistance.

SEC. 2. REFERENCES; EFFECTIVE DATE.

(a) REFERENCE- 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.

SEC. 3. FINDINGS.

The Congress finds the following:

(1) A quality college degree is the cornerstone of the American dream, opening the door to job opportunity and professional fulfillment, while increasing earning power by more than a million dollars over a lifetime; therefore, States and the Federal Government should do more to make it affordable and accessible to all qualified students because--

(A) recent shifts in the economy have increased the demand for college-educated workers and increased the wage gap between college-educated workers and those without a degree (workers with a bachelor's degree earn 75 percent more than workers with just a high school diploma);

(B) jobs requiring some postsecondary education are expected to account for about 42 percent of total job growth from 2000 through 2010;

(C) low-income, college-qualified high school graduates have an annual unmet need for student financial assistance of $3,800 in college expenses, expenses not covered by grants, loans, work, or family savings;

(D) 46 percent of all students who work in addition to being full-time students report 25 hours or more a week of employment; and

(E) 50 percent of those employed more than 25 hours a week report that working hurts their grades and retention in college, and students who work more than 35 hours a week are considerably less likely to complete a year of college than those who work less than 15 hours a week.

(2) State spending on higher education has decreased dramatically over time, and as a result, students and their families, particularly working class and middle class families, have to pay a larger portion of college costs:

(A) In 2003-2004, tuition and fees increased at colleges and universities across the country. Tuition increased by 14.1 percent at four-year public institutions, 13.8 percent at two-year public institutions, and 6.0 percent at four-year private institutions.

(B) While 70 percent of all students pay $8,000 or less in tuition each year, low-income students continue to fall far behind in accessing a college education.

(C) The ratio of a low-income family's earnings used to pay for tuition increased to 71 percent, while this ratio held steady for middle-income families at 17 percent and 6 percent for those with the highest incomes.

(3) Federal student aid is too focused on loans instead of grant aid because--

(A) although approximately $55,000,000,000 is made available annually in direct and indirect Federal aid to postsecondary education students and their families, in 2002, 60 percent of such Federal student aid was in the form of loans while only 40 percent was in the form of grants, a reversal of the distribution 20 years ago;

(B) the purchasing power of the maximum Pell Grant has declined, as Pell Grants now cover only about 40 percent of average fixed costs at 4-year public colleges, about half of what they covered 25 years ago; and

(C) average student indebtedness is $17,000, and reaches over $120,000 for professional school graduates.

SEC. 4. STATE COMMITMENT TO AFFORDABLE COLLEGE EDUCATION.

Title I is amended by inserting after section 131 (20 U.S.C. 1015) the following new section:

`SEC. 132. STATE COMMITMENT TO AFFORDABLE COLLEGE EDUCATION.

`(a) MAINTENANCE OF EFFORT REQUIRED- No State shall reduce the total amount provided by the State for public institutions of higher education in such State for any academic year beginning on or after July 1, 2003, to an amount which is less than the average amount provided by such State to such institutions of higher education during the academic years between July 1, 1998, and July 1, 2003.

`(b) WITHHOLDING OF ALL EDUCATION ADMINISTRATIVE FUNDS FOR VIOLATIONS- Notwithstanding any other provision of law, the Secretary of Education shall withhold from any State that violates subsection (a) any amount that would otherwise be available to the State for administrative expenses and costs under any Federal education program until such State has corrected such violation.'.

SEC. 5. COST CONTAINMENT STRATEGIES.

Title I is further amended by inserting after section 132 (as added by section 4) the following new section:

`SEC. 133. COST CONTAINMENT STRATEGIES.

`(a) REQUIREMENTS- Each institution of higher education shall in accordance with the requirements of this section engage in, and report upon, cost containment strategies. Such strategies may include (but are not limited to) the following activities:

`(1) bulk purchasing;

`(2) joint faculty appointments;

`(3) streamlining administration;

`(4) energy conservation and savings;

`(5) technological innovations; and

`(6) joint degree offerings.

`(b) FIVE-YEAR PLANS- Within 2 years after the enactment of the Act, each institution of higher education shall submit a 5-year plan on their cost containment strategies and any progress made to date to the Secretary of Education.

`(c) RESEARCH INTO COST CONTAINMENT METHODS-

`(1) RESEARCH AUTHORIZED- From the funds appropriated under paragraph (2), the Secretary is authorized--

`(A) to conduct or provide for the conduct of research to identify methods of cost containment currently utilized by institutions of higher education and systems of such institutions, and research into other possible methods of cost containment;

`(B) to disseminate--

`(i) the information obtained by such research to such institutions and systems; and

`(ii) other research that has identified successful methods of cost containment;

`(C) to publicly recognize institutions of higher education that are doing an effective job at cost containment; and

`(D) to work together with such institutions and systems to implement these methods.

`(2) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subsection $1,000,000 for fiscal year 2004 and such sums as may be necessary for each of the 4 succeeding fiscal years.

`(d) CONSUMER INFORMATION-

`(1) ANNUAL REPORT REQUIRED-

`(A) CONTENTS OF REPORT- The Secretary shall annually prepare and publish a report on college affordability in America. The college affordability report shall provide, at a minimum, comprehensive information on--

`(i) the sticker price, total price of attendance, net tuition price, and net access price for every institution of higher education that participates in the Federal student aid programs under title IV of this Act;

`(ii) the percentage change in the listed sticker price, total price of attendance, net tuition price, and net access price over a 3-, 5-, and 10-year time period for each such institution; and

`(iii) the level of Federal and State support for higher education per capita and per pupil.

`(B) ADVISORY GROUP- To ensure that the annual college affordability in America report provides consumer-friendly information, the Secretary shall convene an advisory group of students, parents, and college officials to help determine the information that shall be included in the report.

`(2) DATA DISSEMINATION- The Secretary shall make publicly available the data collected pursuant to this section, including an institution's net price tuition index as calculated in accordance with subsection (e). 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 average prices for full-time undergraduate students and the institution's rate of increase in the sticker price, total price of attendance, net tuition price, and net access price.

`(3) WEBSITE ENHANCEMENT-

`(A) WEBSITE INFORMATION- In order to further enhance public knowledge and understanding of college affordability, the Secretary shall modify the college opportunities on line (COOL) web site. The goal of such changes shall be to make the website the single best source of information about applying to and paying for a postsecondary education. Such changes shall make the website more user friendly and facilitate the comparison of multiple institutions at the same time. Such website shall provide detailed tuition and student aid data for each institution (including data from the annual college affordability in America report). As part of improving the website, the Secretary shall establish an advisory board of students and parents to guide the redesign. The college price calculator required by paragraph (4) shall be included on the COOL website.

`(B) AVAILABILITY IN OTHER FORM- In addition, the Secretary shall publish all of the institutional information found on the COOL website, minus the college price calculator, and instruct all local educational agencies to notify all their secondary schools of the publication of the COOL web site, both on-line and in-print, and of the steps necessary to procure such information both on-line and in-print.

`(4) COLLEGE PRICE CALCULATOR-

`(A) ESTABLISHMENT- The Secretary shall establish a system for reporting to prospective students and families on the net tuition price of institutions of higher education. Using the most recent data available, the Secretary shall make available the amount of aid typically granted for students based on family income and college attended. Such information shall be made available in the form of a web site price calculator that permits students to be able to enter an institution of higher education and their family income and be presented the sticker price, net tuition price, and net access price for students in their income bracket in order to determine the approximate cost of attending such a school. The calculator shall include a clear disclaimer that financial aid decisions are made on a case-by-case basis and that the included calculations are based on previous years' data and can therefore serve only as general guidelines for the financial aid that a student may expect to receive.

`(B) INFORMATION DISTRIBUTION BY INSTITUTIONS- Each institution of higher education shall make available its sticker price, total price of attendance, net tuition price, and net access price and list examples of what families in each of the quartile income brackets might be expected to pay in the net tuition price for the most recent academic year. This information shall be provided in written form and distributed to all students and applicants and made widely available to the public.

`(e) NET TUITION PRICE INDEX-

`(1) IN GENERAL- The Secretary shall, on the basis of the data submitted under subsection (a), calculate a net tuition price 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 (COOL) website.

`(2) CALCULATION OF INDEX- The net tuition price index shall be equal to the percentage increase in the net tuition price charged for a first-time, full-time, full-year undergraduate student between a preceding academic year and the most recent academic year for which satisfactory data are available.

`(f) DEFINITIONS- For the purposes of this section:

`(1) NET ACCESS PRICE- The term `net access price' means the average total price of attendance for full-time undergraduate students, minus the average grants, loans, and work-study provided to such students, for any academic year.

`(2) NET TUITION PRICE- The term `net tuition price' means the average tuition and fees charged to full-time undergraduate students, minus the average grants provided to such students, for any academic year.

`(3) STICKER PRICE- The term `sticker price' means the average tuition and fees charged to full-time undergraduate students by an institution of higher education for any academic year.

`(4) TOTAL PRICE OF ATTENDANCE- The term `total price of attendance' means the average tuition and fees charged to full-time undergraduate students, as well as the average of the other expenses of such students related to obtaining a higher education, including housing (room and board if the student lives on campus, or rent or related housing costs if the student does not live on campus), books, transportation, for any academic year.

`(5) TUITION- The term `tuition' means the average price of or payment for actual instruction of full-time undergraduate students at an institution of higher education, for any academic year.'.

SEC. 6. PELL PLUS.

Subpart 1 of part A of title IV is amended by inserting after section 401 (20 U.S.C. 1070a) the following new section:

`SEC. 401A. INCENTIVES AND REWARDS: PELL PLUS.

`(a) REWARDS FOR LOW TUITION- For any institution of higher education that, for academic year 2003-2004 or any succeeding academic year, such institution's annual net tuition price increase (expressed as a percentage) for the most recent academic year for which satisfactory data is available is equal to or less than the percentage change in the higher education price index for such academic year, the Secretary shall, notwithstanding any other provision of the law, provide such institution an amount sufficient to provide a 25 percent increase under subpart 1 of part A of title IV to each Pell Grant recipient attending such institution for the next award year beginning after the date of such determination. Each such institution shall distribute any amounts received under this subsection among such Pell Grant recipients by increasing the amount of their Pell Grant awards by 25 percent.

`(b) REWARDS FOR GUARANTEED TUITION-

`(1) BONUS- For each institution of higher education that the Secretary of Education determines complies with the requirements of paragraph (2) or paragraph (3) of this subsection, the Secretary shall, notwithstanding any other provision of the law, provide such institution an amount sufficient to provide a 10 percent increase under subpart 1 of part A of title IV to each Pell Grant recipient attending such institution for the next award year beginning after the date of such determination. Each such institution shall distribute any amounts received under this subsection among such Pell Grant recipients by increasing the amount of their Pell Grant awards by 10 percent.

`(2) 4-YEAR INSTITUTIONS- An institution of higher education that provides a program of instruction for which it awards a bachelor's degree complies with the requirements of this paragraph if such institution guarantees that for any academic year beginning on or after July 1, 2003, and for each of the 4 succeeding continuous academic years, the net tuition price charged to an undergraduate student will not exceed--

`(A) the amount that the student was charged for an academic year at the time he or she first enrolled in the institution of higher education, plus

`(B) the product of the percentage increase in the higher education price index for the prior academic year, or the most recent prior academic year for which data is available, multiplied by the amount determined under subparagraph (A).

`(3) LESS-THAN 4-YEAR INSTITUTIONS- An institution of higher education that does not provide a program of instruction for which it awards a bachelor's degree complies with the requirements of this paragraph if such institution guarantees that for any academic year (or the equivalent) beginning on or after July 1, 2003, and for each of the 1.5 succeeding continuous academic years, the net tuition price charged to an undergraduate student will not exceed--

`(A) the amount that the student was charged for an academic year at the time he or she first enrolled in the institution of higher education, plus

`(B) the product of the percentage increase in the higher education price index for the prior academic year, or the most recent prior academic year for which data is available, multiplied by the amount determined under subparagraph (A).

`(c) MAINTAINING AFFORDABLE TUITION- For any institution of higher education whose increase in the annual net tuition price (expressed as a percentage), for the most recent academic year for which satisfactory data is available, is greater than the percentage increase in the higher education price index for such academic year, the Secretary shall require such institution to submit to the Secretary the following information, within 6 months of such determination:

`(1) a detailed report on the exact causes for the net tuition price increase that outlines revenues and expenditures; and

`(2) cost containment strategies to lower net tuition prices.

`(d) DEFINITIONS-

`(1) NET TUITION PRICE- The term `net tuition price' has the same meaning as provided in section 133(f).

`(2) HIGHER EDUCATION PRICE INDEX- The term `higher education price index' means a statistical measure of change over time in the prices of a fixed market basket of goods and services purchased by colleges and universities through current fund educational and general expenditures (excluding expenditures for research), as developed by the Bureau of Labor Statistics pursuant to section 131(c)(4).'.

SEC. 7. COOPERATIVE EDUCATION REWARDS FOR INSTITUTIONS THAT RESTRAIN TUITION INCREASES.

The Higher Education Act of 1965 (20 U.S.C. 1101 et seq.) is amended by adding at the end the following title:

`TITLE VIII--COOPERATIVE EDUCATION REWARDS FOR INSTITUTIONS THAT RESTRAIN TUITION INCREASES

`SEC. 801. STATEMENT OF PURPOSE; ELIGIBLE INSTITUTIONS.

`(a) PURPOSE- It is the purpose of this title to award grants to institutions of higher education or combinations of such institutions that have restrained their net tuition price increases in order to encourage such institutions to develop and make available to as many of their students as possible work experience that will aid such students in future careers and will enable such students to support themselves financially while in school.

`(b) ELIGIBLE INSTITUTIONS- An institution of higher education shall be eligible to apply for a grant under this title if such institution, and a combination of such institutions shall be eligible to apply for such a grant if each institution in such combination--

`(1) for the academic year for which the institution is applying, keeps such institution's annual net tuition price increase (expressed as a percentage) for the most recent academic year for which satisfactory data is available equal to or less than the percentage change in the higher education price index for such year; and

`(2) for such academic year, provides the guarantee required by paragraph (2) or (3) of section 401A(b).

`(c) DEFINITIONS-

`(1) COOPERATIVE EDUCATION- For the purpose of this title the term `cooperative education' means the provision of alternating or parallel periods of academic study and public or private employment in order to give students work experiences related to their academic or occupational objectives and an opportunity to earn the funds necessary for continuing and completing their education.

`(2) HIGHER EDUCATION PRICE INDEX AND NET TUITION PRICE- The terms `higher education price index' and `net tuition price' have the same meaning as provided in section 133(f).

`SEC. 802. AUTHORIZATION OF APPROPRIATIONS; RESERVATIONS.

`(a) APPROPRIATIONS AUTHORIZED- There are authorized to be appropriated to carry out this title $30,000,000 for fiscal year 2004 and such sums as may be necessary for each of the 5 succeeding fiscal years.

`(b) RESERVATIONS- Of the amount appropriated in each fiscal year--

`(1) not less than 50 percent shall be available for carrying out grants to institutions of higher education and combinations of such institutions described in section 803(a)(1)(A) for cooperative education under section 803;

`(2) not less than 25 percent shall be available for carrying out grants to institutions of higher education described in section 803(a)(1)(B) for cooperative education under section 803;

`(3) not to exceed 11 percent shall be available for demonstration projects under paragraph (1) of section 804(a);

`(4) not to exceed 11 percent shall be available for training and resource centers under paragraph (2) of section 804(a); and

`(5) not to exceed 3 percent shall be available for research under paragraph (3) of section 804(a).

`(c) AVAILABILITY OF APPROPRIATIONS- Appropriations under this title shall not be available for the payment of compensation of students for employment by employers under arrangements pursuant to this title.

`SEC. 803. GRANTS FOR COOPERATIVE EDUCATION.

`(a) GRANTS AUTHORIZED-

`(1) IN GENERAL- The Secretary is authorized--

`(A) from the amount available under section 802(b)(1) in each fiscal year and in accordance with the provisions of this title, to make grants to institutions of higher education or combinations of such institutions that have not received a grant under this paragraph in the 10-year period preceding the date for which a grant under this section is requested to pay the Federal share of the cost of planning, establishing, expanding, or carrying out programs of cooperative education by such institutions or combinations of institutions; and

`(B) from the amount available under section 802(b)(2) in each fiscal year and in accordance with the provisions of this title, to make grants to institutions of higher education that are operating an existing cooperative education program as determined by the Secretary to pay the cost of planning, establishing, expanding, or carrying out programs of cooperative education by such institutions.

`(2) PROGRAM REQUIREMENT- Cooperative education programs assisted under this section shall provide alternating or parallel periods of academic study and of public or private employment, giving students work experience related to their academic or occupational objectives and the opportunity to earn the funds necessary for continuing and completing their education.

`(3) AMOUNT OF GRANTS-

`(A) The amount of each grant awarded pursuant to paragraph (1)(A) to any institution of higher education or combination of such institutions in any fiscal year shall not exceed $500,000.

`(B)(i) Except as provided in clauses (ii) and (iii), the Secretary shall award grants in each fiscal year to each institution of higher education described in paragraph (1)(B) that has an application approved under subsection (b) in an amount which bears the same ratio to the amount reserved pursuant to section 802(b)(2) for such fiscal year as the number of unduplicated students placed in cooperative education jobs during the preceding fiscal year (other than cooperative education jobs under section 804 and as determined by the Secretary) by such institution of higher education bears to the total number of all such students placed in such jobs during the preceding fiscal year by all such institutions.

`(ii) No institution of higher education shall receive a grant pursuant to paragraph (1)(B) in any fiscal year in an amount which exceeds 25 percent of such institution's cooperative education program's personnel and operating budget for the preceding fiscal year.

`(iii) The minimum annual grant amount which an institution of higher education is eligible to receive under paragraph (1)(B) is $1,000 and the maximum annual grant amount is $75,000.

`(4) LIMITATION- The Secretary shall not award grants pursuant to paragraphs (1)(A) and (1)(B) to the same institution of higher education or combination of such institution in any one fiscal year.

`(5) USES- Grants under paragraph (1)(B) shall be used exclusively--

`(A) to expand the quality and participation of a cooperative education program;

`(B) for outreach in new curricular areas; and

`(C) for outreach to potential participants including underrepresented and nontraditional populations.

`(b) APPLICATIONS- Each institution of higher education or combination of such institutions desiring to receive a grant under this section shall submit an application to the Secretary at such time and in such manner as the Secretary shall prescribe. Each such application shall--

`(1) set forth the program or activities for which a grant is authorized under this section;

`(2) specify each portion of such program or activities which will be performed by a nonprofit organization or institution other than the applicant and the compensation to be paid for such performance;

`(3) provide that the applicant will expend during such fiscal year for the purpose of such program or activities not less than the amount expended for such purpose during the previous fiscal year;

`(4) describe the plans which the applicant will carry out to assure, and contain a formal statement of the institution's commitment which assures, that the applicant will continue the cooperative education program beyond the 5-year period of Federal assistance described in subsection (c)(1) at a level which is not less than the total amount expended for such program during the first year such program was assisted under this section;

`(5) provide that, in the case of an institution of higher education that provides a 2-year program which is acceptable for full credit toward a bachelor's degree, the cooperative education program will be available to students who are certificate or associate degree candidates and who carry at least one-half the normal full-time academic workload;

`(6) provide that the applicant will--

`(A) make such reports as may be essential to ensure that the applicant is complying with the provisions of this section, including the reports for the second and each succeeding fiscal year for which the applicant receives a grant with respect to the impact of the cooperative education program in the previous fiscal year, including--

`(i) the number of unduplicated student applicants in the cooperative education program;

`(ii) the number of unduplicated students placed in cooperative education jobs;

`(iii) the number of employers who have hired cooperative education students;

`(iv) the income for students derived from working in cooperative education jobs; and

`(v) the increase or decrease in the number of unduplicated students placed in cooperative education jobs in each fiscal year compared to the previous fiscal year; and

`(B) keep such records as are essential to ensure that the applicant is complying with the provisions of this title, including the notation of cooperative education employment on the student's transcript;

`(7) describe the extent to which programs in the academic discipline for which the application is made have had a favorable reception by public and private sector employers;

`(8) describe the extent to which the institution is committed to extending cooperative education on an institution-wide basis for all students who can benefit;

`(9) describe the plans that the applicant will carry out to evaluate the applicant's cooperative education program at the end of the grant period;

`(10) provide for such fiscal control and fund accounting procedures as may be necessary to assure proper disbursement of, and accounting for, Federal funds paid to the applicant under this title;

`(11) demonstrate a commitment to serving all underserved populations; and

`(12) include such other information as is essential to carry out the provisions of this title.

`(c) DURATION OF GRANTS; FEDERAL SHARE-

`(1) DURATION OF GRANTS- No individual institution of higher education may receive, individually or as a participant in a combination of such institutions--

`(A) a grant pursuant to subsection (a)(1)(A) for more than 5 fiscal years; or

`(B) a grant pursuant to subsection (a)(1)(B) for more than 5 fiscal years.

`(2) FEDERAL SHARE- The Federal share of a grant under section 803(a)(1)(A) may not exceed--

`(A) 85 percent of the cost of carrying out the program or activities described in the application in the first year the applicant receives a grant under this section;

`(B) 70 percent of such cost in the second such year;

`(C) 55 percent of such cost in the third such year;

`(D) 40 percent of such cost in the fourth such year; and

`(E) 25 percent of such cost in the fifth such year.

`(3) SPECIAL RULE- Any provision of law to the contrary notwithstanding, the Secretary shall not waive the provisions of this subsection.

`(d) MAINTENANCE OF EFFORT- If the Secretary determines that a recipient of funds under this section has failed to maintain the fiscal effort described in subsection (b)(3), then the Secretary may elect not to make grant payments under this section to such recipient.

`(e) FACTORS FOR SPECIAL CONSIDERATION OF APPLICATIONS-

`(1) IN GENERAL- In approving applications under this section, the Secretary shall give special consideration to applications from institutions of higher education or combinations of such institutions for programs which show the greatest promise of success because of--

`(A) the extent to which programs in the academic discipline with respect to which the application is made have had a favorable reception by public and private sector employers;

`(B) the strength of the commitment of the institution of higher education or combination of such institutions to cooperative education as demonstrated by the plans and formalized institutional commitment statement which such institution or combination has made to continue the program after the termination of Federal financial assistance,

`(C) the extent to which the institution or combination is committed to extending cooperative education for all students who can benefit, and

`(D) such other factors as are consistent with the purposes of this section.

`(2) ADDITIONAL SPECIAL CONSIDERATION- The Secretary shall also give special consideration to applications from institutions of higher education or combinations of such institutions which demonstrate a commitment to serving all underserved populations.

`SEC. 804. DEMONSTRATION AND INNOVATION PROJECTS; TRAINING AND RESOURCE CENTERS; AND RESEARCH.

`(a) AUTHORIZATION- The Secretary is authorized, in accordance with the provisions of this section, to make grants and enter into contracts for--

`(1) the conduct of demonstration projects designed to demonstrate or determine the feasibility or value of innovative methods of cooperative education from the amounts available in each fiscal year under section 802(b)(3);

`(2) the conduct of training and resource centers designed to--

`(A) train personnel in the field of cooperative education;

`(B) improve materials used in cooperative education programs if such improvement is conducted in conjunction with other activities described in this paragraph;

`(C) furnish technical assistance to institutions of higher education to increase the potential of the institution to continue to conduct a cooperative education program without Federal assistance;

`(D) encourage model cooperative education programs which furnish education and training in occupations in which there is a national need;

`(E) support partnerships under which an institution carrying out a comprehensive cooperative education program joins with one or more institutions of higher education in order to (i) assist the institution other than the comprehensive cooperative education institution to develop and expand an existing program of cooperative education, or (ii) establish and improve or expand comprehensive cooperative education programs; and

`(F) encourage model cooperative education programs in the fields of science and mathematics for women and minorities who are underrepresented in such fields

from the amounts available in each fiscal year under section 802(b)(4); and

`(3) the conduct of research relating to cooperative education, from the amounts available in each fiscal year under section 802(b)(5).

`(b) ADMINISTRATIVE PROVISION-

`(1) IN GENERAL- To carry out this section, the Secretary may--

`(A) make grants to or contracts with institutions of higher education, or combinations of such institutions; and

`(B) make grants to or contracts with other public or private nonprofit agencies or organizations, whenever such grants or contracts will make an especially significant contribution to attaining the objectives of this section.

`(2) LIMITATION-

`(A) The Secretary may not use more than 3 percent of the amount appropriated to carry out this section in each fiscal year to enter into contracts described in paragraph (1)(A).

`(B) The Secretary may use not more than 3 percent of the amount appropriated to carry out this section in each fiscal year to enter into contracts described in paragraph (1)(B).

`(c) SUPPLEMENT NOT SUPPLANT- A recipient of a grant or contract under this section may use the funds provided only so as to supplement and, to the extent possible, increase the level of funds that would, in the absence of such funds, be made available from non-Federal sources to carry out the activities supported by such grant or contract, and in no case to supplant such funds from non-Federal sources.'.

SEC. 8. STUDY.

(a) IN GENERAL- The Secretary of Education shall commission the National Research Council to conduct a national study to determine the viability of developing and implementing standards in environmental, health, and safety areas to provide for differential regulation of industrial laboratories and facilities, on the one hand, and research and teaching laboratories on the other. The National Research Council shall make specific recommendations for statutory and regulatory changes that are needed to develop such a differential approach.

(b) REPORT- The Secretary of Education shall submit the list of those regulations that impose the greatest compliance costs on institutions of higher education and make recommendations for statutory changes to ease the compliance burden 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.

SEC. 9. ARTICULATION AGREEMENT 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. ARTICULATION AGREEMENT DEMONSTRATION PROGRAM.

`(a) PURPOSE; DEFINITION- --

`(1) PURPOSE- It is the purpose of this section to allow demonstration programs that are monitored by the Department of Education to encourage institutions of higher education to enter into articulation agreements or consortia groups, as a means to lower tuition prices to students.

`(2) DEFINITION- For the purposes of this section, the term `articulation agreement' means an agreement between institutions of higher education that specifies the acceptability of courses in transfer toward meeting specific degree requirements.

`(b) DEMONSTRATION PROGRAMS AUTHORIZED-

`(1) IN GENERAL- The Secretary is authorized to select institutions of higher education, systems of such institutions, or consortia of such institutions for voluntary participation in an articulation agreement demonstration program.

`(2) ELIGIBLE APPLICANTS-

`(A) ELIGIBLE INSTITUTIONS- Except as provided in subparagraphs (B), (C), and (D), only an institution of higher education that is eligible to participate in programs under this title shall be eligible to participate in the articulation 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 articulation 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, system, or consortium of institutions desiring to participate in a 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- Each application shall include--

`(A) a description of the institution, system, or consortium's consultation with a recognized accrediting agency or association with respect to quality assurances for the articulation programs to be offered;

`(B) a description of the articulation program to be offered;

`(C) a description of the students to whom the articulation programs will be offered;

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

`(E) such other information as the Secretary may require.

`(d) SELECTION-

`(1) IN GENERAL- For the first year of the demonstration program authorized under this section, the Secretary is authorized to select for participation in the program not more than 100 institutions, systems of institutions, or consortia of institutions. For the third year of the demonstration program authorized under this section, the Secretary may select not more than 250 institutions, systems, or consortia, in addition to the institutions, systems, or consortia selected pursuant to the preceding sentence, to participate in the demonstration program if the Secretary determines that such expansion is warranted based on the evaluations conducted in accordance with subsections (f) and (g).

`(2) CONSIDERATIONS- In selecting institutions to participate in the articulation program in the first or succeeding years of the program, the Secretary shall take into account--

`(A) the number and quality of applications received;

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

`(C) an applicant's--

`(i) financial responsibility;

`(ii) administrative capability; and

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

`(3) PRIORITY- In selecting institutions to participate in the articulation program in the first or succeeding years of the program, the Secretary shall give priority to applicants that involve a large number of schools; public and private agreements; innovative technology to help reduce costs; and, multi-state projects.

`(4) NOTIFICATION- The Secretary shall make available to the public and to the Committee on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives a list of institutions, systems or consortia selected to participate in the articulation program authorized by this section.

`(e) EVALUATIONS AND REPORTS- --

`(1) EVALUATION- The Secretary shall evaluate the demonstration programs authorized under this section on an annual basis. Such evaluations specifically shall review--

`(A) the extent to which the institution, system or consortium has met the goals set forth in its application to the Secretary;

`(B) the number and types of institutions participating in the programs offered;

`(C) the cost containment strategies pursued and the success of such strategies; and

`(D) the effective use of technologies to keep college prices low, while maintaining quality.

`(2) REPORTS-

`(A) IN GENERAL- Within 18 months of the initiation of the demonstration program, the Secretary shall report to the Committee on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives with respect to the evaluations of the demonstration programs authorized under this section.

`(B) ADDITIONAL REPORTS- The Secretary shall provide additional reports to the Committee on Labor and Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives on an annual basis regarding--

`(i) the demonstration programs authorized under this section; and

`(ii) best practices to contain college costs.'.

SEC. 10. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

Section 491(j) (20 U.S.C. 1098(j)) is amended

(1) by striking `and' at the end of paragraph (4);

(2) by striking the period at the end of paragraph (5) and inserting `; and'; and

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

`(6) convene a task force of experts, to be representative of the key constituents in higher education--

`(A) to determine the best methods to finance higher education in the long-term;

`(B) to help public institutions utilize long-term budgeting to plan for the future;

`(C) to review the trends of financing of higher education;

`(D) to define the role played by the States, the Federal government, families, and outside entities in financing higher education, and determine the best methods to strengthen this partnership.'.

END