Republicans, Democrats Differ Over Ideas for College Price Controls

CHAPEL HILL — Two rival bills currently under discussion in the House of Representative Education and Workforce Committee would get the federal government involved in the debate regarding 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 regarding 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 year budget. Both are currently under review by the 21st Century Competitiveness Committee, which is chaired by California Republican Congressman Howard “Buck” McKeon. McKeon is the lead sponsor of the Republican-backed plan, known as H.R. 3311. Massachusetts Congressman 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 38 percent, when adjusted for inflation, at private and public four-year colleges and universities between 1992-1993 and 2002-2003.

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.

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.

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 participates 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.

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 Individuals with Disabilities Education Act, House Education and Workforce Committee Chair John Boehner (R-Ohio) said.

Nearly $500 million in the 2003 fiscal year budget went to the administrative of federal education programs.

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 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 added.
The Tierney bill is also ill-advised, according to Leef.

“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.”