I

105TH CONGRESS

1ST SESSION H. R. 855

To amend the Higher Education Act of 1965 to provide administrative support and information to States for the establishment and operation

of prepaid tuition programs, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 26, 1997

Ms. WOOLSEY introduced the following bill; which was referred to the

Committee on Education and the Workforce

A BILL

To amend the Higher Education Act of 1965 to provide

administrative support and information to States for the

establishment and operation of prepaid tuition programs,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Access to College Edu5 cation (ACE) Act of 1997’’.

6 SEC. 2. FINDINGS.

7 The Congress finds the following:
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1 (1) During the past 15 years, tuition at 4-year

2 public colleges and universities rose 234 percent.

3 (2) In contrast, during this same time, median

4 household income rose only 82 percent.

5 (3) The cost of consumer goods, as measured

6 by the Consumer Price Index, rose only 74 percent

7 during this time.

8 (4) During the past 15 years, the share of

9 schools’ revenues provided by tuition rose from 16

10 percent to 23 percent.

11 (5) The future of America depends on a well

12 educated work force.

13 (6) High-tech, high-wage jobs require post14 secondary education.

15 (7) Parents need information and assistance to

16 save for their children’s higher education.

17 (8) Prepaid college tuition programs are one

18 way parents can make sure they will be able to af19 ford the cost of their children’s college.

20 SEC. 3. ESTABLISHMENT OF PROGRAM.

21 Title X of the Higher Education Act of 1965 is

22 amended by inserting after part E (20 U.S.C. 1135g) the

23 following new part:
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1 ‘‘PART F—ADMINISTRATIVE SUPPORT FOR STATE

2 PREPAID TUITION PROGRAMS.

3 ‘‘SEC. 1096. GRANT PROGRAM AUTHORIZED.

4 ‘‘(a) GENERAL AUTHORITY.—The Secretary shall es5 tablish a program in accordance with the requirements of

6 this section to provide grants to States to support tempo7 rarily the establishment and operation of State prepaid

8 tuition programs. No State shall be eligible to receive more

9 than a single grant under this section.

10 ‘‘(b) APPLICATION REQUIREMENTS.—

11 ‘‘(1) IN GENERAL.—Any State desiring to ob12 tain a grant under this section shall submit to the

13 Secretary an application at such time, in such form,

14 and containing such information or assurances as

15 the Secretary may require by regulation.

16 ‘‘(2) STATE PLAN.—An application under this

17 section shall include a State plan for the establish18 ment and operation of a program to offer parents

19 the opportunity to prepay tuition at State post20 secondary institutions. The State plan shall include

21 a description of—

22 ‘‘(A) the type of prepaid tuition plan the

23 State offers or plans to offer, such as by con24 tract, tuition credit, or certificate, and the insti25 tutions at which prepaid tuition funds will be

26 available for use;
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1 ‘‘(B) the tuition and other expenses to

2 which the prepayment will be applied;

3 ‘‘(C) the method by which the future cost

4 of such tuition and expenses is or will be cal5 culated;

6 ‘‘(D) the options the parents have or will

7 have to make the prepayment;

8 ‘‘(E) the methods by which prepaid tuition

9 funds will be invested;

10 ‘‘(F) the methods by which the funds will

11 be disbursed;

12 ‘‘(G) the methods by which prepaid tuition

13 funds will be taken into account in the calcula14 tion of State student aid eligibility;

15 ‘‘(H) the methods by which the State will

16 inform the public on a regular basis of the actu17 arial projections for the cost of tuition; and

18 ‘‘(I) the methods by which the State will

19 inform the public on a regular basis of the in20 vestment of these funds.

21 ‘‘(3) DISCLOSURE OBLIGATION.—An application

22 under this section shall include an agreement by the

23 State to provide regular periodic disclosures of the

24 actuarial projections for the cost of tuition at State
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1 postsecondary institutions and the investment of

2 prepaid tuition funds.

3 ‘‘(c) USE OF FUNDS.—A State that obtains a grant

4 from funds provided under this section may use such

5 funds—

6 ‘‘(1) to hire a chief administrative officer;

7 ‘‘(2) to obtain office space for the program’s

8 administration;

9 ‘‘(3) to acquire or improve office equipment

10 necessary for a prepaid college tuition program;

11 ‘‘(4) to pay expenses necessary for the public

12 disclosure required by this section;

13 ‘‘(5) to advertise the existence of this program

14 throughout the State; and

15 ‘‘(6) to conduct activities which educate the

16 public about the necessity of early savings for higher

17 education.

18 ‘‘(d) INFORMATION.—In order to assist other States

19 in establishing and improving prepaid tuition programs,

20 any State that receives a grant under this section shall

21 provide to the Secretary such information as the Secretary

22 may request concerning the development of its program.

23 The Secretary shall—

24 ‘‘(1) collect information from existing prepaid

25 tuition programs;
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1 ‘‘(2) correlate such information with significant

2 variables such as—

3 ‘‘(A) population of State;

4 ‘‘(B) number of State postsecondary insti5 tutions;

6 ‘‘(C) average cost of State postsecondary

7 institutions; and

8 ‘‘(D) number of participants currently in

9 program;

10 ‘‘(3) collect studies of prepaid college tuition

11 programs; and

12 ‘‘(4) disseminate to States applying for grants

13 under this section the information and studies col14 lected for the purposes of providing such States with

15 information on successful practices to administer

16 prepaid college tuition programs.

17 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There

18 are authorized to be appropriated to make grants under

19 this section $20,000,000 for fiscal year 1998 and such

20 sums as may be necessary for each of the 3 succeeding

21 fiscal years.’’.

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