News: CJ Exclusives

Parties Compete on College Prices

Rival bills would involve the federal government in debate over tuition increases

Two rival bills under discussion in the U.S. House Education and Workforce Committee would get the federal government involved in the debate on higher-education tuition increases.

Both bills, however, take different approaches to make college more affordable for students.

The Republican plan would call for a College Affordability Index and would give more information to parents and students about college costs. The Democrat plan would also call for an affordability index, however it would punish states that decrease higher-education spending.

The bills are part of an effort to reauthorize the Higher Education Act in time for passage of the 2005 fiscal budget. Both are under review by the 21st Century Competitiveness Committee, which is chaired by California Republican Rep. Howard “Buck” McKeon. McKeon is the lead sponsor of the Republican-backed plan, known as H.R. 3311.

Massachusetts Rep. John Tierney is the lead sponsor of the Democrat bill, known as H.R. 3519.

According to the College Board, which administers the SAT exam to high school students, tuition and fees increased by 38 percent, when adjusted for inflation, at private and public four-year colleges and universities between 1992-1993 and 2002-2003.

In a speech on the House floor, McKeon said tuition increases could prevent two million students from receiving a college education. “This is unacceptable, and I believe we can no longer stand idly by while our nation’s students, the future of our country, are being priced out of the promise of higher education,” McKeon said.

An index of college affordability?

McKeon’s bill, known as the Affordability in Higher Education Act, would create a College Affordability Index. The index would be calculated by using the percentage increase in tuition and fees for a first-time undergraduate student between the first of three previous academic years and the last of those three years. That number would then be divided by the Consumer Price Index from July of the first of three academic years to July of the late of those years.

“This bill moves beyond the rhetoric, and offers real solutions that will hold colleges accountable and empower consumers as we all work together to keep higher education affordable,” McKeon said.

After June 30, 2008, if a college affordability index exceeds 2.0 during a three-year period, that institution would be required to file a report with the Department of Education detailing reasons for the increase and plans to reduce the tuition costs.

There are exemptions to the bill, including one if the total increase is less than $500.

McKeon’s legislative director, James Bergeron, said the bill would give more information to parents and students and would provide more light on tuition costs. An editorial in The Baltimore Sun credited McKeon’s bill with creating a new debate on higher education costs. “We want to put a lot of transparency on the process,” Bergeron said.

But Tierney said McKeon’s bill would not provide parents and students with accurate information. According to Tierney, his bill’s index would provide the best information for those looking at college affordability.

Tierney’s plan, known as the College Affordability and Accountability Act, would require the Department of Education to publish a report on college affordability. The report would provide information on the “sticker price” to attend a college. The bill defines the sticker price as the total price of attendance, net tuition price, and net access price for institutions that participate in federal aid programs.

It would also lists the percentage change in the sticker price, total price of attendance, net tuition price, and net access price during a three-, five- and 10-year period. Also, the amount of federal and state support for higher education per pupil would be in the report.

“Their measure was wrong,” Tierney said.

Republicans have criticized Tierney’s bill, saying the bill amounts to federal price controls on higher-education tuition. Tierney’s bill would prevent states that decrease spending on higher education from receiving money used for the administrative costs of all federal education programs.

The bill also says that no state can reduce the total amount provided to institutions by any amount less than what was spent during a five-year period.

If passed, Tierney’s bill would prevent states that decrease higher-education spending from receiving money for No Child Left Behind and the Individuals with Disabilities Education Act, House Education and Workforce Committee Chairman John Boehner, R-Ohio, said. Nearly $500 million in the fiscal 2003 budget went to the administrative of federal education programs.

“At the same time they falsely accuse President Bush of ‘underfunding’ education, House Democrats are rallying behind a bill that would punish states for higher education by denying them access to million in funds states receive to administer the No Child Left Behind Act, the Individuals with Disabilities Education Act, and other federal education initiatives,” Boehner said in a press release.

Tierney said the comments are an effort by Republicans to put a spin on his bill.

“No, it’s not price control,” Boehner said. “This is an effort of reinvigorating the states.”

A national nonprofit group has come out against Tierney’s bill. Paul Gessing, of the National Taxpayers Union, said Congress should work with states to make sure colleges and universities are using taxpayer money wisely.

“[T]he only way to rein in costs is to ensure that universities are subject to the same pro-consumer forces as service providers in the general marketplace,” Gessing said.

McKeon’s bill has come under fire as well from Democrats, who claim his bill would keep students from receiving federal aid programs.

A recently removed penalty provision would prevent institutions from participating in programs within the Higher Education Act.
The bill, according to information from the House Education and Workforce Committee, would have excluded direct aid to students, such as Pell Grants, and Stafford and Direct Loans.

Earlier in March, McKeon removed that portion of the bill after meeting with representatives from the American Association of State Colleges and Universities.

That group promised McKeon that it would avoid tuition increases. McKeon said he would reinstate the provision if universities and college don’t live up to their end of the promise.

No need for higher-education price controls

George Leef, director of the Pope Center for Higher Education Policy and a former economics professor, had criticism for both bills.

“The McKeon bill is just a sort of price control, and price control is a bad idea, whether we are talking about gasoline, college tuition, or anything else,” Leef said.

“If some colleges and universities raise tuition, students and their parents can and should look for other universities that have increased tuition less or not at all. It’s much better to let consumers deal with the cost issue than for the federal government to blunder in,” Leef said.

Leef said there also was no need for a college affordability index created and run by the federal government. “Students and their parents already have plenty of financial information available to them,” he said.

The Tierney bill is also ill-advised, Leef said.

“The idea that the federal government should penalize states that reduce their spending on higher education is not only an attack on the Constitution, but is based on the ridiculous assumption that all current spending on higher education is necessary,” he said.

“On the contrary, higher-education budgets should be a prime target for the reduction of wasteful spending.”