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New College Affordability Index May Lead to Future Sanctions Prepared: August 2005 Type: Informational Summary On July 22, 2005, the House education committee passed H.R. 609, the "College Access and Opportunity Act of 2005" to reauthorize the Higher Education Act (HEA) (http://edworkforce.house.gov/markups/109th/fc/hr609/720main.htm). Sec. 131 of the HEA as revised in the bill, "Consumer Information and Public Accountability in Higher Education," creates a "college affordability index" (CAI) and requires reporting and other actions by institutions whose tuition and fees exceed the index limit. An institution can determine whether its most recent tuition increases would exceed the index limit by looking up its CAI in the Integrated Postsecondary Education Data System (IPEDS) Peer Analysis System (PAS) (http://nces.ed.gov/ipedspas/). Current Status The proposed CAI is the percentage increase in the institution's tuition and fees charged for a first-time, full-time, full-year undergraduate over the three most recent preceding academic years divided by the percentage increase in the Consumer Price Index (CPI) over the same period. If enacted into law, this bill would require that, effective June 30, 2009, any institution with a CAI greater than 2.0 must provide the Department of Education (ED) with a report that includes the following:
Each institution in the highest 25 percent of institutions with a CAI over 2.0 must also include in its report to ED the results of an analysis conducted by a "quality-efficiency" task force. The task force must include administrators, and business and civic leaders, and may include faculty, students, trustees, parents of students, and alumni. The task force is to analyze areas where the institution operates more expensively than other institutions in its sector to find cost reduction opportunities (see amendment by Mr. Platts). If an institution fails to comply with its management and action plans, and fails to reduce its CAI below 2.0 for the two years following the submission of its management plan, the institution would be placed on an "affordability alert status," the Secretary of Education would make a detailed report available to the public about the institution's "costs and expenditures," and ED would notify the institution's accrediting agency. An institution may be required to "submit to a review and audit by the Inspector General of the Department of Education to determine the cause of the institution's failure." The provision reported in AIR Alert #19 that would have removed these institutions from participation in certain Title IV HEA student financial aid programs is no longer in the bill. Institutions with CAIs above 2.0 that meet either of two exemptions would be required to explain the increase in their costs and tuition and fees, and, if applicable, establish a quality-efficiency task force, but would not be subject to the other proposed sanctions :
How to Find Your CAI Login to the PAS (http://nces.ed.gov/ipedspas/) at the Institution Level using your institutional IPEDS UNITID for username and password, select your institution as a "linchpin," select at least 3 institutions for a comparison group, and then choose Institutions Data from the Reports and Stats menu. The CAI and a College Affordability Risk Indicator is found under Frequently Used/Derived Variables. The CAI Risk Indicator shows whether the institution is at risk (1) or not at risk (0). Other Consumer Information Provisions in the Bill The legislation also calls for re-design of the IPEDS College Opportunity On-Line (COOL) website to provide a "comprehensive" tool for researching and comparing institutions, and publication by ED of a "college consumer profile" for each institution. The profile is to include information on price of attendance, financial aid, average net price, instructional expenditures per full-time equivalent student, enrollment, faculty/student ratios, percentages of full-time and part-time faculty, completion and graduation rates (including transfers from two-year programs), and a link to institutional information regarding mission, accreditation, student services, transfer of credit policies, and, "if appropriate", placement rates and other measures of success in preparing students for entry into or advancement in the workforce, and "any additional information that [ED] may require." Implications for Institutions The information in the PAS makes it possible to determine which institutions would be subject to the proposed sanctions if the provisions in the bill were currently in place. Institutions should determine their own CAI and whether they would be at risk. If this provision of the bill is enacted into law, they will want to monitor the index over the next few years. Although the possible sanctions are not as severe as originally proposed, they still would be significant. Institutions may wish to monitor the progress of this bill and/or send comments to Congress regarding its provisions. The full House is expected to take up the bill in September. Timeline September 4, 2003 - Republican members of the Committee on Education and the Workforce issued "The College Costs Crisis" report. October 16, 2003 - The "Affordability in Higher Education Act of 2003" (H.R. 3311) was introduced. February 8, 2005 - "College Access and Opportunity Act of 2005" (H.R. 609) was introduced. July 22, 2005 - "College Access and Opportunity Act of 2005" was passed by the House Education and the Workforce Committee. Additional Resources The IPEDS Peer Analysis System H.R. 609 as marked up by House Education and the Workforce Committee: http://edworkforce.house.gov/markups/109th/fc/hr609/720main.htm (for provisions related to Section 131, see "Amendment in the Nature of a Substitute (pdf) Offered by Mr. Boehner", and the amendments by Mr. Platts and Mrs. McCarthy) The text of H.R. 609 will be available later at http://thomas.loc.gov Comprehensive information about IPEDS is available at http://nces.ed.gov/ipeds. The IPEDS College Opportunity On-Line website is available at http://nces.ed.gov/ipeds/cool Related AIR Alerts AIR Alert #19, "H.R. 3311 - The Affordability in Higher Education Act of 2003," November 2003 AIR Alert #27, "NCES Seeks Comments on Proposal for Derived and Calculated Variables," November 2004 Coordinated by the Higher Education Data Policy Committee. All opinions expressed herein do not necessarily reflect the official position of the Association for Institutional Research. |