Colleges too costly? Congress wants answers

updated 6:35 p.m. ET July 31, 2008

WASHINGTON - The House moved Thursday to make college costs more transparent, and possibly more affordable, in passing the first major overhaul of the federal higher education act in a decade.

The legislation, which passed the House 380-49 and heading for a Senate vote as early as Thursday night, would give prospective students more information about college tuitions and textbook costs, while making Pell Grants, the main federal aid program for low-income students, available year-round.

"It seems the only thing consistent about college costs is that they are going up and going up rapidly," said Rep. Howard "Buck" McKeon, R-Calif., top Republican on the Education and Labor Committee. "With this bill we hope to change that."

The White House has complained that the legislation creates costly and duplicative programs, but President Bush is expected to sign the House-Senate negotiated measure.

Enactment of the Higher Education Opportunity Act comes five years after the last major overhaul of higher education programs, enacted in 1998, expired. It also comes a year after Congress took other steps, including cutting interest rates on student loans, raising Pell Grants and redirecting billions of dollars from lender subsidies to programs targeting students more directly, to help families and students cope with soaring college costs.

Biggest increases would be explained
This bill focuses more on transparency: It requires the Education Department to publish detailed data about college pricing trends on its web sites and requires the top 5 percent of colleges with the greatest cost increases over three years to explain those increases to the Education Department.

Textbook publishers must share pricing information with professors and "unbundle" materials so students can buy only those materials they need for their classes. The practice of bundling textbooks with supplementary materials such as CDs is one reason textbooks cost about $900 per student every year, according to a 2005 government study.

"To address soaring costs this legislation will address the transparency and the accountability of the tuition pricing system, shining a bright light on the prices set by colleges and universities," said House Education Committee chairman George Miller, D-Calif.

Among other provisions, the 1,100-page bill would:

• Strengthen restrictions on lenders, guaranty agencies and colleges offering or accepting payments and gifts as a condition of making student loans.
• Allow service members to defer payments, interest-free, on federal loans while they are on active duty. Provides in-state tuition for service members and their dependents who have lived in a state for more than 30 days.
• Simplify the federal aid application process and provides more protections and disclosure for students taking out private loans.
• Increase Pell Grants from $6,000 in 2009 to $8,000 for 2014, and allows low-income students to receive the grants year-round, not just for fall and spring semesters.

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