House aims to hold down college costs

updated 7:14 p.m. ET Feb. 7, 2008

WASHINGTON - House approved legislation Thursday aimed at curtailing rising college costs and limiting student debt.

The bill, which passed 354-58, calls on the Education Department to create a Web site that students and their families can use to compare the cost of attending different schools. Colleges are to be grouped according to how expensive they are and how quickly their costs have been going up.

Schools with rapidly rising prices will have to explain what's behind the increases and how they will be addressed.

"The bill will create a higher-education system that is more affordable and fairer and easier to navigate," said Rep. George Miller, D-Calif., who chairs the House education committee.

Democrats and Republicans say the bill, similar to one approved by the Senate, is needed because college costs have been rising faster than inflation.

States' control of student aid at issue
Average annual tuition and fees for in-state students at public four-year colleges and universities total about $6,200 this year. The price is about $23,700 at private four-year colleges and universities. Public two-year colleges run about $2,360 on average.

The bill seeks to prevent states from reducing what they spend on student aid. States could lose federal money if they make such cuts. That generated some criticism during debate on the House floor.

"It is wrong to tell states how they will appropriate their money," said Rep. Rob Bishop, R-Utah, echoing the sentiment of the National Governors Association.

Supporters of the provision say it is needed to keep aid levels up because states often cut student assistance during tight budget times.

"To solve the college-cost crisis, we're empowering consumers with meaningful information about college costs and holding institutions and states accountable for keeping higher education affordable," said California Rep. Buck McKeon, the top Republican on the education committee.

Expanding Pell Grants
The bill also would expand federal Pell Grants to summer-school students and would address conflicts of interest in the student lending industry that were highlighted last year by New York Attorney General Andrew Cuomo.

Colleges would have to disclose relationships they have with lenders. The bill also bans gifts and profit-sharing agreements between colleges and banks that issue federally backed student loans or private loans, which don't come with a federal subsidy or guarantee.

Students increasingly have been turning to private loans, which generally cost more than those that are federally subsidized. Students sometimes seek private loans when they are unaware of other options or have maxed out on federal assistance.

The bill requires banks issuing private loans to inform borrowers about federal options. It also tries to make sure financial aid officers at schools know about all the loans students are taking out. The idea is to enable such officials to better guide students in making good financial decisions.

The legislation seeks to streamline how students get financial aid by creating a new, shorter financial aid application form for low-income families.

Stemming textbook costs
Students may spend less than the estimated $900 they now spend on textbooks each year if the bill becomes law. It would require publishers to sell textbooks without bundling them with workbooks, DVDs or other products that drive up prices.

The bill also requires publishers to disclose how much textbooks cost when selling them to school officials. Faculty members don't always seek out price information when pairing books with courses, and publishers aren't usually up front with the information, said Luke Swarthout of the U.S. Public Interest Research Group, which lobbies for student aid.

"It sounds silly," Swarthout said. "Who sells products without price tags? Textbook publishers."

The House and Senate bills would have to be merged. The Bush administration is opposed to some provisions in the House bill, including one that limits the Education Department's role in accrediting universities.

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