§1161m Incentives and rewards for low tuition

Summary

Awards federal grant money to colleges that keep tuition low or keep price increases small for the 2009–2010 school year or any later year. Colleges qualify if they have tuition increases in the lowest 20% for their type, or if public colleges have tuition in the lowest 25% among similar public schools (four-year, two-year, or less-than-two-year), or if a public college raised tuition by less than $600 for a first-time, full-time student. The college must use the money for need-based grants to students who qualify for Federal Pell Grants, and no student can get more aid than the school’s cost of attendance. The law covers nine school categories (four-year, two-year, and under-two-year, each split into public, private nonprofit, and private for-profit). The words “tuition and fees” and “net price” are defined in another part of the law. Colleges that meet extra rules can get a bonus amount. For bachelor’s schools, the extra rule is either being a public school in the lowest tuition quartile or promising a multi-year tuition cap starting July 1, 2009 and continuing for four more school years (public cap $600 per year for full-time students; other schools use a formula tied to the student’s starting charge and recent percent changes). For non‑bachelor programs the promise must cover the year starting July 1, 2009 and the next 1.5 years. Bonus aid is given first to Pell-eligible students who were enrolled when the college met the rules, then to other Pell-eligible students. Funds were authorized for fiscal year 2009 and each of the five years after.