§1161m Incentives and Rewards for Low Tuition

Summary

Pays colleges money if they keep tuition low or don’t raise it much. For the 2009–2010 school year and later, the Secretary must give grants to schools that meet one of three tests: their tuition increase is in the lowest 20% for their type of school, a public school’s tuition is in the lowest quarter for its type, or a public school’s tuition rise was less than $600 for a first‑time, full‑time undergraduate. The money must be given out as 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 types of schools (four‑year, two‑year, and less‑than‑two‑year; public, private nonprofit, and private for‑profit). The Secretary also gives a bonus to schools that promise to keep tuition from rising above set limits. For four‑year schools the promise must cover the year starting on or after July 1, 2009 and the four continuous years after it. For shorter programs the promise must cover that year and the 1.5 continuous years after it. Public schools may meet the rule by staying in the lowest tuition quartile or by using a $600 cap for full‑time students; other schools may use a formula based on the student’s initial charge plus recent percentage increases. Bonus funds must be awarded first to Pell students who were enrolled that year, then to other Pell students. The terms “tuition and fees” and “net price” are defined in section 1015a. Funding was authorized for fiscal year 2009 and the five years after it.