§1161m Incentives and Rewards for Low Tuition

Summary

The Education Secretary must give grants from the money set aside under subsection (e) to colleges and trade schools that, for the 2009–2010 school year or any year after that, keep tuition increases very low. A school can get a grant if one of these is true: its tuition increase is in the lowest 20% for its category; it is a public school and its tuition is in the lowest quartile for its category (this applies to public 4‑year, 2‑year, and less‑than‑2‑year schools); or it is a public school whose tuition increase for a first‑time, full‑time undergraduate is less than $600. The school must use the grant as need‑based aid for students who qualify for Federal Pell Grants, and no student can get more aid than the school’s cost of attendance. The law groups schools into nine categories (4‑year, 2‑year, and less‑than‑2‑year, each split into public, private nonprofit, and private for‑profit). The Secretary also gives a bonus to schools that meet extra low‑tuition rules. For schools that award bachelor’s degrees, a bonus applies if the public school is in the lowest tuition quartile, or if any school promises a tuition cap starting on or after July 1, 2009 and lasting for that year plus the four following continuous academic years. For schools that do not award bachelor’s degrees, the same rules apply but the promise must last for that year plus the 1.5 following continuous academic years. For public schools the cap can be $600 per year for a full‑time undergraduate. For other schools the cap is the student’s initial charge plus the school’s recent three‑year percentage change applied to that amount. Bonus aid must go first to Pell students who were enrolled when the school met the rule, then to other Pell students. “Tuition and fees” and “net price” mean what section 1015a says. Money was authorized for fiscal year 2009 and the five fiscal years after that.