penses of such students related to obtaining a higher 
education, including housing (room and board if the 
student lives on campus, or rent or related housing 
costs if the student does not live on campus), books, 
transportation, for any academic year. 
‘‘(5) TUITION.—The term ‘tuition’ means the 
average price of or payment for actual instruction of 
full-time undergraduate students at an institution of 
higher education, for any academic year.’’. 
SEC. 6. PELL PLUS. 
Subpart 1 of part A of title IV is amended by insert-
ing after section 401 (20 U.S.C. 1070a) the following new 
section: 
‘‘SEC. 401A. INCENTIVES AND REWARDS: PELL PLUS. 
‘‘(a) REWARDS FOR LOW TUITION.—For any institu-
tion of higher education that, for academic year 2003–
2004 or any succeeding academic year, such institution’s 
annual net tuition price increase (expressed as a percent-
age) for the most recent academic year for which satisfac-
tory data is available is equal to or less than the percent-
age change in the higher education price index for such 
academic year, the Secretary shall, notwithstanding any 
other provision of the law, provide such institution an 
amount sufficient to provide a 25 percent increase under 
subpart 1 of part A of title IV to each Pell Grant recipient
attending such institution for the next award year begin-
ning after the date of such determination. Each such insti-
tution shall distribute any amounts received under this 
subsection among such Pell Grant recipients by increasing 
the amount of their Pell Grant awards by 25 percent. 
‘‘(b) REWARDS FOR GUARANTEED TUITION.—
‘‘(1) BONUS.—For each institution of higher 
education that the Secretary of Education deter-
mines complies with the requirements of paragraph 
(2) or paragraph (3) of this subsection, the Sec-
retary shall, notwithstanding any other provision of 
the law, provide such institution an amount suffi-
cient to provide a 10 percent increase under subpart 
1 of part A of title IV to each Pell Grant recipient 
attending such institution for the next award year 
beginning after the date of such determination. Each 
such institution shall distribute any amounts re-
ceived under this subsection among such Pell Grant 
recipients by increasing the amount of their Pell 
Grant awards by 10 percent. 
‘‘(2) 4-YEAR INSTITUTIONS.—An institution of 
higher education that provides a program of instruc-
tion for which it awards a bachelor’s degree complies 
with the requirements of this paragraph if such in-
stitution guarantees that for any academic year be-
ginning on or after July 1, 2003, and for each of the 
4 succeeding continuous academic years, the net tui-
tion price charged to an undergraduate student will 
not exceed—
‘‘(A) the amount that the student was 
charged for an academic year at the time he or 
she first enrolled in the institution of higher 
education, plus 
‘‘(B) the product of the percentage in-
crease in the higher education price index for 
the prior academic year, or the most recent 
prior academic year for which data is available, 
multiplied by the amount determined under 
subparagraph (A). 
‘‘(3) LESS-THAN
4-YEAR
INSTITUTIONS.—An 
institution of higher education that does not provide 
a program of instruction for which it awards a bach-
elor’s degree complies with the requirements of this 
paragraph if such institution guarantees that for 
any academic year (or the equivalent) beginning on 
or after July 1, 2003, and for each of the 1.5 suc-
ceeding continuous academic years, the net tuition 
price charged to an undergraduate student will not 
exceed—
‘‘(A) the amount that the student was 
charged for an academic year at the time he or 
she first enrolled in the institution of higher 
education, plus 
‘‘(B) the product of the percentage in-
crease in the higher education price index for 
the prior academic year, or the most recent 
prior academic year for which data is available, 
multiplied by the amount determined under 
subparagraph (A). 
‘‘(c) MAINTAINING AFFORDABLE TUITION.—For any 
institution of higher education whose increase in the an-
nual net tuition price (expressed as a percentage), for the 
most recent academic year for which satisfactory data is 
available, is greater than the percentage increase in the 
higher education price index for such academic year, the 
Secretary shall require such institution to submit to the 
Secretary the following information, within 6 months of 
such determination: 
‘‘(1) a detailed report on the exact causes for 
the net tuition price increase that outlines revenues 
and expenditures; and 
‘‘(2) cost containment strategies to lower net 
tuition prices. 
‘‘(d) DEFINITIONS.—
‘‘(1) NET TUITION PRICE.—The term ‘net tui-
tion price’ has the same meaning as provided in sec-
tion 133(f). 
‘‘(2) HIGHER EDUCATION PRICE INDEX.—The 
term ‘higher education price index’ means a statis-
tical measure of change over time in the prices of a 
fixed market basket of goods and services purchased 
by colleges and universities through current fund 
educational and general expenditures (excluding ex-
penditures for research), as developed by the Bureau 
of Labor Statistics pursuant to section 131(c)(4).’’. 
SEC. 7. COOPERATIVE EDUCATION REWARDS FOR INSTITU-
TIONS THAT RESTRAIN TUITION INCREASES. 
The Higher Education Act of 1965 (20 U.S.C. 1101 
et seq.) is amended by adding at the end the following 
title: 
‘‘TITLE VIII—COOPERATIVE EDU-
CATION REWARDS FOR INSTI-
TUTIONS 
THAT 
RESTRAIN 
TUITION INCREASES 
‘‘SEC. 801. STATEMENT OF PURPOSE; ELIGIBLE INSTITU-
TIONS. 
‘‘(a) PURPOSE.—It is the purpose of this title to 
award grants to institutions of higher education or com-
binations of such institutions that have restrained their
net tuition price increases in order to encourage such insti-
tutions to develop and make available to as many of their 
students as possible work experience that will aid such stu-
dents in future careers and will enable such students to 
support themselves financially while in school. 
‘‘(b) ELIGIBLE INSTITUTIONS.—An institution of 
higher education shall be eligible to apply for a grant 
under this title if such institution, and a combination of 
such institutions shall be eligible to apply for such a grant 
if each institution in such combination—
‘‘(1) for the academic year for which the insti-
tution is applying, keeps such institution’s annual 
net tuition price increase (expressed as a percent-
age) for the most recent academic year for which 
satisfactory data is available equal to or less than 
the percentage change in the higher education price 
index for such year; and 
‘‘(2) for such academic year, provides the guar-
antee required by paragraph (2) or (3) of section 
401A(b). 
‘‘(c) DEFINITIONS.—
‘‘(1) COOPERATIVE EDUCATION.—For the pur-
pose of this title the term ‘cooperative education’ 
means the provision of alternating or parallel periods 
of academic study and public or private employment