I 
108TH CONGRESS 
1ST SESSION H. R. 3311
To amend the Higher Education Act of 1965 to address the rising cost 
of postsecondary education. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 16, 2003
Mr. MCKEON (for himself, Mr. BOEHNER, Mr. ISAKSON, Mr. PETRI, Mr. 
COLE, and Mr. DUNCAN) 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 address 
the rising cost of postsecondary education.
Be it enacted by the Senate and House of Representa-
tives 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 
‘‘Affordability in Higher Education Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Reference; effective date. 
TITLE I—COLLEGE AFFORDABILITY INDEX 
Sec. 101. Establishment of index.
‘‘Sec. 131. Consumer information and public accountability in higher edu-
cation.’’
TITLE II—INNOVATIVE APPROACHES TO HIGHER EDUCATION 
Sec. 201. College Affordability Demonstration Program. 
‘‘Sec. 486A. College Affordability Demonstration Program.’’
TITLE III—TRANSFER OF CREDIT 
Sec. 301. Requirement relating to credit transfer. 
TITLE IV—SENSE OF CONGRESS 
Sec. 401. Regulatory burden impact on tuition and fees.
SEC. 2. REFERENCE; EFFECTIVE DATE. 
(a) REFERENCE.—Except as otherwise expressly pro-
vided in this Act, 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 con-
sidered 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. 
TITLE I—COLLEGE 
AFFORDABILITY INDEX 
SEC. 101. ESTABLISHMENT OF INDEX. 
Section 131 (20 U.S.C. 1015) is amended to read as 
follows: 
‘‘SEC. 131. CONSUMER INFORMATION AND PUBLIC AC-
COUNTABILITY IN HIGHER EDUCATION. 
‘‘(a) DATA COLLECTION.—
‘‘(D) the average amount of financial as-
sistance received by a full-time undergraduate 
student, including—
‘‘(i) each type of assistance or benefits 
described in 428(a)(2)(C)(ii); 
‘‘(ii) fellowships; 
‘‘(iii) institutional and other assist-
ance; 
‘‘(iv) loans under parts B and D; 
‘‘(E) the number of students receiving fi-
nancial assistance described in each clause of 
subparagraph (D); and 
‘‘(F) the institutional instructional expend-
iture per full-time equivalent student. 
‘‘(b) DATA DISSEMINATION.—The Secretary shall 
make available the data collected pursuant to this section, 
including an institution’s college affordability index as cal-
culated in accordance with subsection (c), and its afford-
ability alert status (if required under subsection 
(d)(3)(A)(ii)). Such data shall be made available in a man-
ner that permits the review and comparison of data sub-
missions of individual institutions of higher education. 
Such data shall be presented in a form that is easily acces-
sible and understandable and allows parents and students 
to make informed decisions based on the prices for typical
full-time undergraduate students and the institution’s rate 
of cost increase. 
‘‘(c) COLLEGE AFFORDABILITY INDEX.—
‘‘(1) IN GENERAL.—The Secretary shall, on the 
basis of the data submitted under subsection (a), 
calculate a college affordability index for each insti-
tution 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 
website. 
‘‘(2) CALCULATION OF INDEX.—The college af-
fordability index shall be equal to—
‘‘(A) the percentage increase in the tuition 
and fees charged for a first-time, full-time, full-
year undergraduate student between the first of 
3 most recent preceding academic years and the 
last of those 3 academic years, divided by 
‘‘(B) the percentage increase in the Con-
sumer Price Index-All Urban Consumers (Cur-
rent Series) from July of the first of those 3 
academic years to July of the last of those 3 
academic years. 
‘‘(d) OUTCOMES AND ACTIONS.—
‘‘(1) RESPONSE FROM INSTITUTION.—Effective 
on June 30, 2008, an institution that has a college 
affordability index that exceeds 2.0 for any 3-year 
interval ending on or after that date shall provide a 
report to the Secretary, in such a form, at such 
time, and containing such information as the Sec-
retary may require. Such report shall include—
‘‘(A) an explanation of the factors contrib-
uting to the increase in the institution’s costs 
and in the tuition and fees charged to students; 
‘‘(B) a management plan stating the spe-
cific steps the institution is and will be taking 
to reduce its college affordability index; 
‘‘(C) an action plan, including a schedule, 
by which the institution will reduce increases in 
or stabilize, such costs and tuition and fees; and 
‘‘(D) if determinations of tuition and fee 
increases are not within the exclusive control of 
the institution, a description of the agency or 
instrumentality of State government or other 
entity that participates in such determinations 
and the authority exercised by such agency, in-
strumentality, or entity. 
‘‘(2) INFORMATION TO THE PUBLIC.—Upon re-
ceipt of the institution’s report and management
plan under paragraph (1), the Secretary shall make 
the institution’s report required under paragraph (1) 
available to the public in accordance with subsection 
(b). 
‘‘(3) CONSEQUENCES OF FAILURE TO REDUCE 
COLLEGE AFFORDABILITY INDEX.—
‘‘(A) CONSEQUENCES FOR TWO YEAR CON-
TINUATION OF FAILURE.—If the Secretary de-
termines that the institution has failed to com-
ply with the management plan and action plan 
submitted by the institution under this sub-
section following the next 2 academic years that 
begin after the submission of such plan, and 
has failed to reduce the college affordability 
index below 2.0 for such 2 academic years, the 
Secretary—
‘‘(i) shall make available to the public 
a detailed report provided by the institu-
tion on all costs and expenditures and on 
all tuition and fees charged to students; 
‘‘(ii) shall place the institution on an 
affordability alert status and shall make 
the information regarding the institution’s 
failure available in accordance with sub-
section (b);
‘‘(iii) shall notify the institution’s ac-
crediting agency of the institution’s failure; 
and 
‘‘(iv) may require the institution to 
submit to a review and audit by the In-
spector General of the Department of Edu-
cation to determine the cause of the insti-
tution’s failure. 
‘‘(B) LOSS
OF
ELIGIBILITY
TO
PARTICI-
PATE.—If the Secretary determines that the 
failure to reduce the college affordability index 
below 2.0 has continued for 3 academic years 
after the submission of the management plan, 
the Secretary shall provide reasonable notice to 
the institution of action to be taken, after op-
portunity for a hearing, to remove the institu-
tion from participation in all the programs 
under title IV, other than under subpart 1 of 
part A, and parts B and D. No such removal 
shall, in the case of any grant awarded for a 
multiyear term prior to such removal, result in 
the termination of such grant before the end of 
such term. 
‘‘(C) INAPPLICABILITY OF LOAN LIMIT IN-
CREASES.—Notwithstanding subparagraph (B)
and the provisions on annual and aggregate 
loan limits in parts B and D, no increase in 
loan limits under part B or D of title IV that 
is enacted by Congress after the date of enact-
ment of this section shall apply to a loan to 
cover the cost of attendance at an institution 
that has lost eligibility to participate in other 
programs pursuant to subparagraph (B). 
‘‘(D) REGAINING ELIGIBILITY.—The Sec-
retary shall prescribe procedures by which an 
institution that reduces its college affordability 
index may regain eligibility for participation 
after any removal from participation under sub-
paragraph (B). 
‘‘(4) INFORMATION TO STATE AGENCIES.—Any 
institution that reports under paragraph (1)(C) that 
an agency or instrumentality of State government or 
other entity participates in the determinations of tui-
tion and fee increases shall, prior to submitting any 
information to the Secretary under this subsection, 
submit such information to, and request the com-
ments and input of, such agency, instrumentality, or 
entity. With respect to any such institution, the Sec-
retary shall provide a copy of any communication by
the Secretary with that institution to such agency, 
instrumentality, or entity. 
‘‘(5) EXEMPTIONS.—
‘‘(A) RELATIVE PRICE EXEMPTION.—The 
Secretary shall, for any 3-year interval for 
which college affordability indexes are computed 
under paragraph (1), determine and publish the 
dollar amount that, for each class of institution 
described in subparagraph (C) of this para-
graph, represents the maximum tuition and fees 
charged for a full-time undergraduate student 
by the least costly quartile of institutions within 
each such class during the last year of such 3-
year interval. An institution that has a college 
affordability index computed under paragraph 
(1) that exceeds 2.0 for any such 3-year inter-
val, but that, on average during such 3-year in-
terval, charges less than such maximum tuition 
and fees shall not be subject to the actions re-
quired by subparagraph (B) or (C) of para-
graph (1), or any action under paragraph (3), 
unless such institution, for a subsequent 3-year 
interval, charges more than such maximum tui-
tion and fees.
Education Statistics regarding efforts to obtain data on 
the cost and price of higher education under this section 
and pursuant to the program participation agreement en-
tered into under section 487. 
‘‘(f) GAO STUDY AND REPORT.—
‘‘(1) GAO STUDY.—The Comptroller General 
shall conduct a study of the policies and procedures 
implemented by institutions in increasing the afford-
ability of postsecondary education. Such study shall 
include information with respect to—
‘‘(A) a list of those institutions that—
‘‘(i) have reduced their college afford-
ability indexes; or 
‘‘(ii) are, as determined under sub-
section (d)(5)(A), within the least costly 
quartile of institutions within each class 
described in subsection (d)(5)(C); 
‘‘(B) policies implemented to stem the in-
crease in tuition and fees and institutional 
costs; 
‘‘(C) the extent to which room and board 
costs and prices changed; 
‘‘(D) the extent to which other services 
were altered to affect tuition and fees;
‘‘(E) the extent to which the institution’s 
policies affected student body demographics; 
‘‘(F) what, if any, operational factors 
played a role in reducing tuition and fees; 
‘‘(G) the extent to which academic quality 
was affected, and how; 
‘‘(H) the extent to which policies and prac-
tices reducing costs and prices may be rep-
licated from one institution to another; and 
‘‘(I) other information as necessary to de-
termine best practices in increasing the afford-
ability of postsecondary education. 
‘‘(2) FINAL REPORT.—The Comptroller General 
shall submit a report regarding the findings of the 
study required by paragraph (2) to the appropriate 
authorizing committees of Congress not later than 
July 31, 2010. 
‘‘(g) STUDENT AID RECIPIENT SURVEY.—
‘‘(1) SURVEY REQUIRED.—The Secretary shall 
conduct a survey of student aid recipients under title 
IV on a regular and State-by-State basis, but not 
less than once every 4 years— 
‘‘(A) to identify the population of students 
receiving Federal student aid;
‘‘(B) to describe the income distribution 
and other socioeconomic characteristics of fed-
erally aided students; 
‘‘(C) to describe the combinations of aid 
from State, Federal, and private sources re-
ceived by students from all income groups; 
‘‘(D) to describe the debt burden of edu-
cational loan recipients and their capacity to 
repay their education debts, and the impact of 
such debt burden on career choices; 
‘‘(E) to describe the role played by the 
price of postsecondary education in the deter-
mination by students of what institution to at-
tend; and 
‘‘(F) to describe how the increased costs of 
textbooks and other instructional materials af-
fects the costs of postsecondary education to 
students. 
‘‘(2) SURVEY
DESIGN.—The survey shall be 
representative of full-time and part-time, under-
graduate, graduate, and professional and current 
and former students in all types of institutions, and 
designed and administered in consultation with the 
Congress and the postsecondary education commu-
nity.
‘‘(3) DISSEMINATION.—The Secretary shall dis-
seminate the information resulting from the survey 
in both printed and machine readable form. 
‘‘(h) REGULATIONS.—The Secretary is authorized to 
issue such regulations as may be necessary to carry out 
the provisions of this section.’’. 
TITLE 
II—INNOVATIVE 
AP-
PROACHES TO HIGHER EDU-
CATION 
SEC. 201. COLLEGE AFFORDABILITY DEMONSTRATION PRO-
GRAM. 
Part G of title IV is amended by inserting after sec-
tion 486 (20 U.S.C. 1093) the following new section: 
‘‘SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION 
PROGRAM. 
‘‘(a) PURPOSE.—It is the purpose of this section—
‘‘(1) to provide, through a college affordability 
demonstration program, for increased innovation in 
the delivery of higher education and student finan-
cial aid in a manner resulting in reduced costs for 
students as well as the institution by accelerating 
degree or program completion, increasing availability 
of, and access to, distance components of education 
delivery, and other alternative methodologies; and 
‘‘(2) to help determine—
‘‘(A) the most effective means of delivering 
student financial aid as well as quality edu-
cation; 
‘‘(B) the specific statutory and regulatory 
requirements that should be altered to provide 
for more efficient and effective delivery of stu-
dent financial aid, as well as access to high 
quality distance education programs, resulting 
in a student more efficiently completing post-
secondary education; and 
‘‘(C) the most effective methods of obtain-
ing and managing institutional resources. 
‘‘(b) DEMONSTRATION PROGRAM AUTHORIZED.—
‘‘(1) IN
GENERAL.—In accordance with the 
purposes described in subsection (a) and the provi-
sions of subsection (d), the Secretary is authorized 
to select not more than 100 institutions of higher 
education or systems of such institutions for vol-
untary participation in the College Affordability 
Demonstration Program in order to enable partici-
pating institutions to carry out such purposes by 
providing programs of postsecondary education, and 
making available student financial assistance under 
this title to students enrolled in those programs, in
a manner that would not otherwise meet the require-
ments of this title. 
‘‘(2) WAIVERS.—The Secretary is authorized to 
waive for any institutions of higher education, or 
any system or consortia of institutions of higher 
education, selected for participation in the College 
Affordability Demonstration Program, any require-
ments of this Act or the regulations thereunder as 
deemed necessary by the Secretary to meet the pur-
pose described in subsection (a)(1). 
‘‘(3) ELIGIBLE APPLICANTS.—
‘‘(A) ELIGIBLE INSTITUTIONS.—Except as 
provided in subparagraphs (B) and (C), only an 
institution of higher education that is eligible to 
participate in programs under this title shall be 
eligible to participate in the demonstration pro-
gram 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 demonstration program authorized under 
this section. 
‘‘(C) SPECIAL RULE.—Subject to subpara-
graph (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 eligi-
ble to participate in the demonstration program 
authorized under this section. 
‘‘(c) APPLICATION.—
‘‘(1) IN GENERAL.—Each institution or system 
of institutions desiring to participate in the dem-
onstration 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 OF APPLICATIONS.—Each ap-
plication for the college affordability demonstration 
program shall include at least the following: 
‘‘(A) a description of the institution or sys-
tem of institutions and what quality assurance 
mechanisms are in place to insure the integrity 
of the federal financial aid programs; 
‘‘(B) a description of each regulatory or 
statutory requirement for which waivers are 
sought, with a reason for each waiver; 
‘‘(C) a description of the programs being 
offered and the affected students;
‘‘(D) a description of the expected out-
comes of the program changes proposed, includ-
ing the estimated reductions in costs both for 
the institution and for students; 
‘‘(E) a description of any collaborative ar-
rangements with other institutions or organiza-
tions to reduce costs; 
‘‘(F) a description of any expected eco-
nomic impact of participation in the program 
within the community in which the institution is 
located; 
‘‘(G) a description of how the institution 
will reduce the costs of instructional materials, 
including textbooks; 
‘‘(H) an assurance that the participating 
institution or system of institutions will offer 
full cooperation with the ongoing evaluations of 
the demonstration program provided for in this 
section; and 
‘‘(I) any other information or assurances 
the Secretary may require. 
‘‘(d) SELECTION.—In selecting institutions to partici-
pate in the demonstration program under this section, the 
Secretary shall take into account—
‘‘(1) the number and quality of applications re-
ceived, determined on the basis of the contents re-
quired by subsection (c)(2); 
‘‘(2) the Department’s capacity to oversee and 
monitor each institution’s participation; 
‘‘(3) an institution’s—
‘‘(A) financial responsibility; 
‘‘(B) administrative capability; 
‘‘(C) program or programs being offered 
via distance education; 
‘‘(D) student completion rates; and 
‘‘(E) student loan default rates; and 
‘‘(4) ensuring the participation of a diverse 
group of institutions with respect to size, mission, 
and geographic distribution. 
‘‘(e) NOTIFICATION.—The Secretary shall make 
available to the public and 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 a list of institutions and systems of in-
stitutions selected to participate in the demonstration pro-
gram authorized by this section. Such notice shall include 
a listing of the specific statutory and regulatory require-
ments being waived for each institution or system of insti-
tutions and a description of the distance education courses 
to be offered. 
‘‘(f) EVALUATIONS AND REPORTS.—
‘‘(1) EVALUATION.—The Secretary shall evalu-
ate the demonstration program authorized under 
this section on a biennial basis. Such evaluations 
specifically shall review—
‘‘(A) the number and types of students 
participating in the programs offered, including 
the progress of participating students toward 
recognized certificates or degrees and the extent 
to which participation in such programs in-
creased; 
‘‘(B) issues related to student financial as-
sistance for distance education; 
‘‘(C) effective technologies and alternative 
methodologies for delivering student financial 
assistance; 
‘‘(D) the extent of the cost savings to the 
institution, the student, and the Federal Gov-
ernment by virtue of the waivers provided, and 
an estimate as to future cost savings should the 
demonstration program continue;
‘‘(E) the extent to which students saved 
money by virtue of completing their postsec-
ondary education sooner; 
‘‘(F) the extent to which the institution re-
duced its tuition and fees and its costs by virtue 
of participation in the demonstration program; 
‘‘(G) the extent to which any collaborative 
arrangements with other institutions or organi-
zations have reduced the participating institu-
tion’s costs; and 
‘‘(H) the extent to which statutory or reg-
ulatory requirements not waived under the dem-
onstration program present difficulties for stu-
dents or institutions. 
‘‘(2) POLICY
ANALYSIS.—The Secretary shall 
review current policies and identify those policies 
that present impediments to the development and 
use of distance education and other nontraditional 
methods of expanding access to education. 
‘‘(3) REPORTS.—The Secretary shall provide a 
report to the Committee on Health, Education, 
Labor, and Pensions of the Senate and the Com-
mittee on Education and the Workforce of the 
House of Representatives on an annual basis regard-
ing—
‘‘(A) the demonstration program author-
ized under this section; 
‘‘(B) the results of the evaluations con-
ducted under subsection (f); 
‘‘(C) the cost savings to the Federal Gov-
ernment by the demonstration program author-
ized by this section; and 
‘‘(D) recommendations for policy, statu-
tory, or regulatory changes to increase the effi-
ciency and effective delivery of financial aid. 
‘‘(g) OVERSIGHT.—In conducting the demonstration 
program authorized under this section, the Secretary 
shall, on a continuing basis—
‘‘(1) ensure compliance of institutions or sys-
tems of institutions with the requirements of this 
title (other than the sections and regulations that 
are waived under subsection (b)(2)); 
‘‘(2) provide technical assistance to institutions 
in their application to and participation in the dem-
onstration program; 
‘‘(3) monitor fluctuations in the student popu-
lation enrolled in the participating institutions or 
systems of institutions; 
‘‘(4) monitor changes in financial assistance 
provided at the institution; and