Bill May Penalize Colleges for Raising Costs of Tuition

(U-WIRE) ANN ARBOR, Mich.- Colleges raising their tuition at excessive rates would face federal government sanctions, including restrictions on federal aid, under a proposed bill that aims to increase the accountability of higher education institutions. The proposal comes on the heels of “The College Cost Crisis,” a report presented last week by two U.S. House Republicans who criticize colleges for repeatedly increasing tuition more than the percent rise in the rate of inflation and the Consumer Price Index. But critics of the proposed Affordability in Higher Education Act said it would lead to a decrease in the quality of higher education institutions, and that public schools would be hurt most by the proposal. U.S. Rep. Howard “Buck” McKeon of California, a sponsor of the proposed bill and one of the cost report’s authors, said colleges that have not controlled their budgets efficiently are primarily to blame for cost increases that have “been going up at twice the rate of family income.” The bill — which McKeon spokesman Vartan Djihanian said is still being finalized but will be introduced sometime in the near future — would reduce federal aid to schools that increase total costs of attendance by twice the rate of the CPI’s increase for three consecutive years. “I’m hopeful that [schools] get out of the negative attitude that they can’t control their costs,” said McKeon, chairman of the 21st Century Competitiveness Subcommittee of the House Education and Workforce Committee. But reductions in federal aid would not affect direct government assistance to students, such as Pell grants or student loans, a news release from McKeon’s office states.Under the bill, higher education institutions increasing their costs of attendance by more than twice the CPI for two straight years would be required to file a report with the Department of Education explaining the increases and outlining a plan to keep costs down in the future, McKeon said. Schools are currently required to file reports detailing tuition rates, fees and room and board costs within the department, and the bill would also simplify the filing process, he added. The cost report, co-authored by education committee chairman John Boehner of Ohio, states that tuition rates in the last decade rose 38 percent after being adjusted for inflation, and that since the 1980’s costs rose three times as much as median family income. Last year costs for four-year schools rose in every state, even though 10 of those states increased state appropriations by as much or more than the tuition increases, the report states. Tuition increases have persisted regardless of economic circumstances and the level of state funding, it states.”What incentive do [schools] have to keep their costs down? There is no control,” McKeon said. And the university was one of those schools that increased its financial aid budget at a higher rate than tuition in its general budget released in July. Courant said that wages schools must pay their faculty and staff always increase faster than prices, while productivity levels are relatively the same. He added that the CPI is a measure of average economic costs, but to maintain its academic quality the university must keep up with the rate of advancement in knowledge across the world.”We don’t stop studying classical music when hip-hop comes along, we actually study both,” he said. Additionally, punishing schools that increase costs at twice the CPI by taking away another source of revenue in federal assistance would create a “disaster” and would decrease the overall quality of education, Courant said.”When you increase price controls, which is what these would be, you get a reduction in quality,” he said. And such price controls would create a “downward spiral,” hurting public institutions more than private schools, which can rely on higher levels of private endowments, Weygand said. But this scenario is not likely, because the legislation probably will not pass into law, said Weygand, a former Congressman. Many legislators will “look at this as being a concept for accountability, but not the proper way to go,” he said.