Higher education is in the crosshairs of the new Congress and the Trump administration. While some of their proposals are aimed at fueling culture war issues, such as DEI and gender politics, others have broader appeal. These include proposals that aim to address the high cost of college. Across the political spectrum, Americans believe that college tuition costs are too high and that the federal government should impose some type of cap on the tuition that colleges charge.1 

The higher education system runs on federal funding: colleges receive more than $135 billion in federal grant and loan aid every year.2 However, the federal government does not place any limits on tuition costs. This creates an incentive for schools to increase tuition to capture more federal dollars. Some type of federal guidelines on tuition makes sense to protect against the danger that institutions are charging more, or charging too much, because of the availability of the aid. 

Recent Republican proposals to address this problem include expanding on the Gainful Employment rule’s concept of linking aid eligibility to debt and income levels, mentioned as a possible budget reconciliation proposal, and proposals, in the GOP’s College Cost Reduction Act, to cap aid and to require colleges to pay a penalty to the federal government equal to a portion of the student debt that was not repaid by graduates of the college.3 

Concerns about prices, and about the potential impact of federal policies on prices, are not new. Lawmakers who want to develop a policy solution would benefit from studying some of the ideas of the past, and the ways they either didn’t work, or were undermined by opposition.

College Price Controls: A Federal History

The first federal attempt to protect against institutions raising tuitions in response to the availability of aid came with the original GI Bill, which essentially tried to peg aid to the market-set price, the “customary” charges that a non-veteran student would pay. As detailed in the chronology below, this market-price concept was carried through to some later reforms but was never fully implemented. 

Congress eschewed the GI Bill’s voucher approach in adopting the 1958 National Defense Education Act. In creating the campus-based loan, grant, and work-study programs, colleges would be provided with lump sums and could distribute the aid, along with their matching contribution, only until it ran out: charging students more or getting more of them to borrow did not increase the aid the institution received.

The Higher Education Act (HEA) of 1965 brought banks and guaranty agencies into the federal system with the idea that private underwriting of student loans would lead to consideration of appropriate college tuition pricing and value. As explained below, several factors undermined that concept. Reforms in the 1990s used student loan default rates to restrict or curtail institutions’ eligibility for federal aid, a crude form of constraining aid based on outcomes. Later such efforts included outcome measures such as earnings, debt, and loan repayment to determine eligibility for federal aid.

Information strategies have been a recurring theme for the past twenty-five years, starting with the 1998 HEA reauthorization requiring the Department of Education to collect data on tuition and cost of attendance, and to publicize the information in a form that “allows parents and students to make informed decisions based on the costs for typical full-time undergraduate students.” Congress later required a “net price calculator,” tuition hike “watch lists,” and the College Scorecard, a public-facing database detailing student debt and earnings data by program.

A chronology of major federal higher education policy efforts follows, with a description of provisions related to tuition levels or college value.4

Morrill Land Grant Act of 1862. Lacking tax revenue but having plenty of land taken from Native peoples, Congress offered grants of land to states to support higher education: the states would sell or lease the land to produce revenue to launch at least one college.5 Each college was to have a major focus on agriculture and the mechanical arts, in contrast to what was seen at the time as elitist and impractical liberal arts education. While literature about the debates that led to the act indicated no concern about tuition charges, the purpose of the legislation was access for the masses, for “farmers and mechanics,” and for “agriculturalists and artisans.” At one point, Representative Morrill referred to the bill as providing “cheap scientific education,” likely based on the assumption that the landed-funded endowments the law created would help to cover the cost of operating the colleges.6

The Post-WWII G.I Bill. The original GI Bill was to cover the “customary” costs of tuition and other fees for one year, up to $500 (about $7,500 today.)7 The idea was that the government would pay on behalf of veterans “the same fees, tuition, and other charges which were required of a non-veteran student enrolled in the same course.”8 The availability of the GI Bill funds prompted thousands of new institutions to be established, mostly for-profit (many of them were providing pre-college level training). Since the colleges were start-ups that enrolled veterans on the GI Bill, there were no non-veteran “customary” charges upon which to base the federal aid. The institutions, according to a 1952 congressional investigation known as the Teague Report, were able “to virtually write their own charges against the Treasurer of the United States without regard to the amount, type, and quality of service rendered.” 

The Bradley Report, issued in 1956 by a panel commissioned by President Eisenhower, found that under the first GI Bill,

[t]he Government was overcharged for much of the training in schools below college level, particularly in for-profit schools. There were also problems in the reimbursement of colleges and universities, although it seems clear that none was paid more than the cost of educating the veterans. Any appraisal of the education and training program for World War II veterans must recognize these problems, most of which were inherent in the basic law.9

In an attempt to address the problem, Congress gave the Veterans Administration (VA) the authority to determine “fair and reasonable tuition rates.” The agency implemented the requirement with a cost-plus approach: institutions would submit evidence of actual operating expenditures for the program and would be allowed an additional one-ninth profit. While better than nothing, the cost-plus approach, investigators found, “created an incentive on the part of the schools to pad their cost figures” and to fabricate expenses.

Korean War-era GI Bill. The 1952 legislation that established educational support for veterans of the emerging conflict in Korea included two key recommendations from the Teague Report: 

  1. Instead of making direct tuition payments to institutions, the VA provided a fixed amount to students, from which they would pay tuition, keeping the remainder for other expenses.
  2. Require that programs have a critical mass of non-veteran students. (Congress established that level at 15 percent; the Teague Report had recommended 25 percent).

The legislation also more formally established the use of accrediting agencies as a screening tool.10

Four years later, the Bradley Commission declared the tuition reform a success:

The elimination of the separate tuition payment in the Korean program was done in order to curtail overcharging on the part of proprietary schools and to avoid problems in reimbursing low-tuition public colleges on a “cost” basis. This appears to have been a sound decision and the present arrangement is working well. For any future program of educational benefits, the decision as to the method of reimbursement should be made in the light of experience under Public Law 346 and Public Law 550 as well as the conditions prevailing at such future time.11

National Defense Education Act (NDEA). The 1957 Russian launch of a craft into space caused Cold War-spooked Americans to worry that the United States was behind in science and technology education. In response, Congress enacted a broad bill to strengthen K–12 and higher education. President Eisenhower described it as an emergency, temporary measure, ending after four years.12 (Many of the programs still exist, seventy years later).

One part of the NDEA was aimed at graduate education, specifically for the purpose of increasing the supply of teachers at the college level. Living stipends were paid to students for up to three years, and the institutions received up to $2,500 per student per year (about $22,000 today), based on the institution’s accounting of the per-student cost of establishing or expanding the particular program.13 Many institutions charged the program less than the maximum.14

The program was designed in a way that made it difficult for colleges to charge high tuition: the institutions were allowed to charge tuition, but their cost-of-education funding would be cut by the amount of tuition charge.15

The policy appears to have essentially been an incentive for the colleges to accept the $2,500 subsidy as full payment of tuition. The issue of tuition was an ongoing topic of discussion in the program’s implementation. An advisory committee established to guide the implementation of the graduate funding program was concerned about institutions taking the federal funds and also charging students tuition. They issued the following (non-binding) guidance:

Institutions are expected to make suitable arrangements to assure a net stipend to the holder of a Title IV Fellowship which is adequate to enable him to pursue a full time course of study without outside employment. For example: If an institution charges tuition it might award an additional scholarship to the Fellow or pay his tuition from the institutional payment which accompanies the fellowship. Another alternative is to waive tuition in whole or in part. Some institutions will find it important to note that the amount of tuition collected from a student is deducted from the attributable cost in arriving at the payment to be made by the Office of Education to the institution.16

In addition to limiting tuition charges, the program limited the amount of teaching that a student could be required to do during the fellowship, and prohibited any additional aid from other federal programs.

The NDEA also included a student loan program, now known as Perkins Loans, available for both undergraduate and graduate education. The federal government appropriated funds to colleges, which added some of their own funds. By making loans and collecting on those loans, institutions established revolving funds that would be made available to later students. The college’s participation was a form of risk-sharing, since any defaults would reduce the funds available for later use.

Higher Education Act of 1965 (HEA). The NDEA provided formula grants for its loan and work-study programs, and distributed the graduate education fellowships competitively. The HEA included voucher aid like the GI Bill, where the funds followed students. But instead of grants, the major component of the HEA was a loan program different from what was created under the NDEA. 

The new loan program—guaranteeing bank loans to students—would take advantage of the private underwriting that, at least theoretically, would prevent low-quality or excessively costly programs from being funded. At the same time, student access would be expanded and costs lowered through modest subsidies (such as protection against default) administered by private nonprofit organizations and states. The model Congress tried to emulate was a private nonprofit loan guarantor that worked with banks and institutions Congress actually opposed the legislation because they were concerned that federal involvement would undermine the private underwriting necessary for the program to work.17

The guaranteed student loan program’s risk-sharing approach would place third parties—lenders and guarantors—in the role of deciding whether an institution or student was worthy of the support, and at what price. The federal government did not stick to this plan, however. Lobbyists successfully had Congress eliminate the risk-sharing approach. By 1976, according to the Government Accountability Office (GAO), the federal government took on “100 percent of program costs, while still requiring a network of guaranty agencies to help administer the program.”18 19

Education Amendments of 1972. Debates about college affordability in the early 1970s focused on the question of whether federal aid should be tuition-focused or institution-focused. In this “bitter debate,” private institutions generally fell into the former camp with public institutions in the latter.20 The private colleges won, with the new Basic Educational Opportunity Grant (BEOG, later the Pell Grant) capped at 50 percent of the cost of attendance, meaning that the higher the tuition, the larger the grant could be. 

Vietnam-era GI Bill. In extending the GI Bill to Vietnam veterans in 1976, Congress included a provision capping the proportion of students in a program who can be receiving any type of federal grant aid at 85 percent, regardless if students were receiving aid from the GI Bill, Pell, or SEOG. Under this proposal, if 15 percent of the students could not pay the tuition price without federal aid, then the program would lose eligibility for federal aid. This meant the price had to be reasonable given the quality of the program. 

The provision was requested by President Ford’s VA administrator: “It is our position that, if an institution of higher learning cannot attract sufficient nonveteran and nonsubsidized students to its programs it presents a great potential for abuse of our GI educational programs.”21 The Senate Veterans’ Affairs Committee report stated that the provision was “intended to allow the free market mechanism to prove the worth of the course offered by requiring that it respond to the general dictates of an open market.”

Unlike prior versions of the 85-15 rule, this one applied to all postsecondary courses, not just vocational certificate courses offered by for-profit and private non-profit institutions.22 The Supreme Court upheld the law as “a way of protecting veterans by allowing the free market mechanism to operate. . . minimiz[ing] the risk that veterans’ benefits would be wasted on educational programs of little value.”23

The provision was never fully implemented. Shortly after passage, key supporters of the provision in Congress had second thoughts, probably based on concerns expressed by institutions’ lobbyists. One policymaker said, “we have learned that in many instances in our zeal to prevent abuse we have fashioned rules that are too rigid or are overinclusive in their operation.”24 Amendments in 1977 created loopholes that essentially gutted the provision.

The Ford administration also took steps to prevent institutions from becoming too reliant on loans provided under the nascent federal student loan program. Terrel Bell, the education commissioner (and later President Reagan’s education secretary), explained, “I personally question the soundness of an institution whose existence is totally derived from signing up students who qualify for Federal aid.”25 The agency adopted a new regulation mandating a review of any institution where 60 percent or more of the enrolled students were using federal loans.26

MISAA and PLUS. In the late 1970s, the focus of the Democratic Congress and the Carter administration was on making more college aid available to the “middle class.” The 1978 Middle Class Student Assistance Act (MISAA), which made subsidized loans available to families at higher income levels than previously, led to an explosion of borrowing by students.27 The student borrowing elevated concerns that middle-class parents who could pay had become less willing and able to pay. The Parent PLUS program was established in 1980 to address that concern; parents could borrow through the bank-based guaranteed student loan program “instead of having to mortgage your house,” according to a Carter official.28 

Some commentators at the time did worry about the way that colleges’ responses to the aid would increase costs and reduce quality. While praising the tremendous gains in college affordability and diversity, a writer at The Atlantic worried that

[t]he system of financial aid that made these improvements possible is increasing college dependency on the federal government and thereby weakening educational institutions and making them more expensive and less efficient. Federal subsidy of college expenses is also encouraging irresponsible consumer practices and promoting unethical conduct and a decline in the value we place on education. We are, in short, paying less for education today, but we are getting less from it as well.29

The Reagan administration scaled back financial aid, eliminating in 1981 the MISAA program and changing PLUS to the Auxiliary Loan to Assist Students (ALAS) program for graduate and professional students,30 with some parental borrowing apparently continuing.31 The 1986 HEA Reauthorization changed the ALAS program to SLS (Supplemental Loans for graduate and independent Students), and brought back the PLUS program for parents.

“The Bennett Hypothesis.” In 1987, President Reagan’s new secretary of education, William J. Bennett, took aim at higher education, accusing colleges and universities of raising tuition excessively because they knew the federal government would provide the grants and loans to cover the costs.32 He did not propose any specific tuition limitation, though. (The Reagan administration proposed reducing federal loan subsidies by establishing an income-contingent loan program). “It is simply not fair to ask taxpayers, many of whom do not go to college, to pay more than their fair share of the tuition burden.” High student loan default rates, particularly at for-profit institutions, caused Bennett’s focus to shift to criticizing that sector, and advocating cutting off aid to institutions with high default rates.33 

1992 HEA Reauthorization. The 1992 amendments included at least three provisions aimed at tuition prices.34 The first was an extension of the price-check concept in the GI Bill—the 85 percent cap—to Title IV aid for proprietary schools (this is now the “90-10 rule”). The translation was sloppy, though, counting revenue rather than students, and applying the rule schoolwide rather than by program. As a result, the reform’s utility as a price-check mechanism was weakened.35 A second provision also targeted excessive reliance on federal aid, triggering a state review of any institution (in any sector) where two-thirds of its students were using Title IV aid or two-thirds of the school’s expenditures came from Title IV. The state review provisions were repealed before they were implemented.36

A third provision required federally recognized accrediting agencies to assess the appropriateness of tuition prices.37 This provision was repealed in 1998 after the Federal Trade Commission, in response to a request for an advisory opinion, said that the provision could run afoul of antitrust laws.38

1998 HEA Reauthorization. In 1997, the Republican Congress established a National Commission on the Cost of Higher Education.39 The commission’s proceedings involved dueling studies on the question of whether federal aid contributed to price increases. Ultimately, the commission called for further study, while expressing “unanimous[] concern about sharp increases in student borrowing,” adding 

[w]hat is unclear is whether these increases have occurred because (1) higher loan limits and the new “un-subsidized” program permit more borrowing; (2) more families are choosing to finance college expenses through loans rather than from savings or current income; or (3) the price of attending higher education has increased. The Commission’s judgment is that all three factors are probably involved.

The commission’s solutions included encouraging colleges and philanthropy to make cost control and “efficiency” a higher priority, and developing better consumer information about costs and prices and to improve accountability. The commission determined that tuition price controls will not work and would be destructive of academic quality in higher education. The report included some alternatives to price controls.

Congress took a consumer-information approach in reauthorizing the HEA. The legislation required the Department of Education to collect data on tuition and cost of attendance, and to publicize the information in a form that “allows parents and students to make informed decisions based on the costs for typical full-time undergraduate students.”40

Capping Tuition Prices. In 2003, the chairs of the relevant House committee and subcommittee, Representative Boehner and Representative McKeon, issued a report declaring a college cost “crisis,” citing rising tuition and public concerns about wasteful spending by colleges.41 Representative McKeon floated draft legislation that would have cut off some aid to colleges where tuition had increased steeply several years in a row.42 At a House hearing, college leaders and Democratic lawmakers stated that the price-control proposal was too crude and would harm educational quality.43 Representative McKeon dropped his proposal in 2004, declaring that his efforts had successfully prompted institutions to adopt voluntary measures to curb tuition increases.44

The Spellings Commission. In 2005, Secretary of Education Margaret Spellings established a National Commission on the Future of Higher Education to develop a “comprehensive national strategy for postsecondary education.” Its chairman, Texas businessman Charles Miller, was convinced that spending in higher education was wasteful and that greater accountability was needed.45 Miller’s advocacy of a national test for higher education spurred intense opposition. 

The commission’s 2006 report called for institutions to be more transparent about costs, and should measure student achievement on a value-added basis.46 Ultimately, Secretary Spellings backed away from the idea of some federal measurement of educational outcomes, satisfied that accrediting agencies agreed to do more to monitor so-called “student learning outcomes.”47

Grad PLUS, IBR, and PSLF 2005-10. Provisions in three budget reconciliation bills had major effects on the dynamics of the federal loan programs, potentially inviting higher tuition prices particularly in graduate programs. A 2005 law made graduate students eligible for Grad PLUS loans capped at whatever tuition and other expenses a school has set. A 2007 law created Public Service Loan Forgiveness after ten years of payments in certain programs, and an income-based repayment (IBR) program with payments capped at 15 percent of income with any remainder forgiven after twenty-five years. (Grad PLUS was excluded from IBR forgiveness, but the 2008 implementing regulations granted forgiveness to Grad PLUS loans). Then the 2010 health care legislation reduced the IBR maximum to 10 percent and twenty years.48

Higher Education Opportunity Act. The 2008 reauthorization of the HEA included several provisions aimed at providing more information to consumers about tuition levels and changes in tuition.49 They included the following:

  • Additional data items to be included on the public-facing database College Navigator, including net price by family income levels, and the average changes in tuition for the most recent three years.
  • A requirement that each institution have:
    • A “net price calculator” that would provide prospective students with individualized estimates, and
    • a “multi-year tuition calculator” that would estimate costs for the full duration of the intended degree.
  • The establishment of a “watch list” of institutions with large increases in tuition,50 and authorization for a Pell Grant bonus for students at institutions with low tuition or lower increases in tuition.51

The tuition watch lists, first published by the Department of Education in 2011, were found in a 2020 study to have had no impact on college affordability.52 (The bonus payments were never funded by Congress).

Debt-Earnings Ratios: Gainful Employment. In 2009 the Department of Education proposed to deny federal aid to programs in which past graduates had high debt burdens relative to their post-college earnings. The rule applied to all for-profit college programs, as well as to non-degree public and nonprofit programs.53 The rule, adopted in 2011 and revised in 2014, was aimed at encouraging colleges to reduce tuition and/or improve quality and advising. The rule was rescinded by the next administration, in 2019.54 Among other explanations, Secretary of Education DeVos said her goal was, instead of making low-value programs ineligible for aid, to “end information asymmetry between institutions and students” by providing them with data that enable them “to evaluate program value and make informed enrollment and investment decisions.”55 

In 2023, the Biden administration adopted a revised GE rule, applicable to for-profit and non-degree programs, as well as a Financial Value Transparency requirement that applies to all institutions and programs receiving federal aid.56 The 2024 GE rule included two metrics: a debt-to-earnings rate, and a measure comparing graduate earnings to the earnings of high school graduates in the labor force in the state where the program is offered. Programs that leave students with debt that is out of proportion to their earnings, or that fail to provide any earnings benefit, face loss of eligibility to participate in federal financial aid. The Department of Education is currently collecting the data needed to implement the new rules.57 Expanding on GE has been mentioned as a possible inclusion in the 2025 GOP Budget Reconciliation bill.

College Scorecard. In 2013, President Obama announced a plan to “develop a new ratings system to help students compare the value offered by colleges and encourage colleges to improve” based on cost/affordability data and other factors.58 The ratings plan was seen as an attempt to “rein in college costs.”59 Opposition from colleges led the administration to drop the idea of ratings in favor of a new public-facing web site that would provide data on student debts and earnings by college and by program.60 The data available on the College Scorecard continued to be enhanced during the Trump and Biden administrations.

Instructional spending proposals. In 2019, TCF-sponsored research recommended ways that existing federal data on college spending and revenue could be used for accountability, as well as the limitations of the data.61 TCF created a calculator showing how much of a student’s tuition dollar, on average, a school is spending on actual instruction.62 This analysis showed that some colleges, especially in the for-profit college sector, allocate an extremely small amount of tuition dollars to instruction, suggesting that tuition revenues are being used for marketing and advertising, or pocketed as profits for for-profit college owners or investors. In recent years, some lawmakers have sought to ensure that the amount of tuition charged by an institution be reasonable in relation to the amount that an institution spends on actual instruction, or instruction and student support. For example, the Jobs to Compete Act (2023) proposed that programs eligible for a new proposed short-term Pell grant not charge more than double the amount spent on education.63

Risk Sharing. In 2015, Senator Lamar Alexander, as chair of the Senate Committee on Health, Education, Labor and Pensions, floated the idea of reducing college costs by requiring “risk-sharing” by schools, arguing that “If colleges and universities have this incentive, it may not only help students make wiser decisions about borrowing, it could help reduce the cost of college—thereby reducing debt.”64 (Senator Alexander also raised concerns about regulatory costs as a contributor to high tuition).65 Various risk-sharing proposals were developed, but none were advanced to legislation during that Congress.66 In 2024, a detailed risk-sharing proposal was included in the College Cost Reduction Act (CCRA), which was passed by the House Committee on Education and the Workforce.67

Price-Earnings Ratio. The CCRA (noted above) also included a requirement that accreditors assess whether a college’s tuition prices for a program are appropriate given the earnings of graduates. (Note that an earlier proposal for accreditor involvement, in 1992 (see above), faced antitrust concerns and was repealed).

Tuition Controls Are Needed

In the early decades of the federal grant and loan programs, a minority of students were receiving aid, and so the financial constraints on average American families helped to prevent federal aid itself from leading to inflated tuitions. With the declining fortunes of the middle class in recent decades, combined with the expansion of financial aid, it has become impossible to deny that federal aid has caused inappropriately high tuition in at least some circumstances. This problem should be addressed.

Advocates and lawmakers would benefit from reviewing past efforts to keep tuitions in check, to assess whether some of the proposals should be revisited. In addition, lawmakers can review why some strategies did not work, in order to avoid making the same mistakes again.

Note: This report is adapted from a historical background paper published as an appendix to a December 2023 report on graduate student aid policy.68

Notes

  1. Carolyn Fast, Robert Shireman, and Alex Edwards. “College Tuition Is Out of Control. Voters Want Government to Do Something,” The Century Foundation, July 26, 2023, https://tcf.org/content/commentary/college-tuition-is-out-of-control-voters-want-government-to-do-something/.
  2. FY 2025 Congressional Justification, U.S. Department of Education, https://www.ed.gov/sites/ed/files/about/overview/budget/budget25/justifications/p-sao.pdf.
  3. “ACE Analysis Shows College Cost Reduction Act Could Lead to Cuts in College Funding,” American Council on Education, May 24, 2024, https://www.acenet.edu/News-Room/Pages/ACE-Analysis-CCRA.aspx.
  4. Prior to the Civil War, most higher education policy was enacted at the state level.
  5. The land was frequently not in the state that was granted it. See text of the Morrill Act, https://www.archives.gov/milestone-documents/morrill-act.
  6. J. H. Florer, “Major Issues in the Congressional Debate of the Morrill Act of 1862,” History of Education Quarterly, 8(4), 459–478, 1968, https://doi.org/10.2307/367539.
  7. An amendment allowed higher rates of tuition if the veteran chose to have those amounts subtracted from their subsistence allowance.
  8. “Investigating Education and Training Programs Under GI Bill,” House Select Committee to Investigate Educational Programs Under the GI Bill, House of Representatives, 82nd Congress, 2nd session February 1952 (Teague Report), https://drive.google.com/file/d/0B7aqIo3eYEUtZzJYWnpRbVkwZE0/view?usp=sharing.
  9. President’s Commission on Veterans’ Pensions, “Veterans Benefits in the United States,” April 1956, p. 291; see https://www.va.gov/vetdata/docs/Bradley_Report.pdf.
  10. David Whitman, “Truman, Eisenhower, and the First GI Bill Scandal,” The Century Foundation, January 24, 2017, https://tcf.org/content/report/truman-eisenhower-first-gi-bill-scandal/.
  11. Bradley Report, p. 300, https://www.va.gov/vetdata/docs/Bradley_Report.pdf.
  12. He also expressed disappointment that Congress established a student loan program rather than providing scholarships as he had recommended. NDEA Signing statement. https://www.presidency.ucsb.edu/documents/statement-the-president-upon-signing-the-national-defense-education-act.
  13. “Institutions were asked to determine, as best they could,the cost reasonably attributable to each fellow in the estab-lishing of a new program or the expanding of an existing one. In making applications, institutions were to figure this amount in the fashion that seemed right to them. Sometime later . . . more precise regulations were to be issued on how to determine this amount.” Clarence B. Lindquist, “NDEA Fellowships for College Teaching, 1958-1968; Title IV, National Defense Education Act of 1958,” DFEW Office of Education, 1971, https://files.eric.ed.gov/fulltext/ED054739.pdf.
  14. The program was eventually changed to a flat payment, mostly because institutions claimed that they found it too onerous to estimate the per-student cost for expansion.
  15. Clarence B. Lindquist, “NDEA Fellowships for College Teaching, 1958-1968; Title IV, National Defense Education Act of 1958,” DFEW Office of Education, 1971, https://files.eric.ed.gov/fulltext/ED054739.pdf.
  16. Clarence B. Lindquist, “NDEA Fellowships for College Teaching, 1958-1968; Title IV, National Defense Education Act of 1958,” DFEW Office of Education, 1971, https://files.eric.ed.gov/fulltext/ED054739.pdf.
  17. The guarantor, USA Funds, ended up becoming one of the federally designated agencies in the FFEL program.
  18. U.S. Government Accountability Office, “Financial Audit: Guaranteed Student Loan Program’s Internal Controls and Structure Need Improvement,” March 1993, https://www.gao.gov/products/afmd-93-20.
  19. “Have Student Loan Guaranty Agencies Lost Their Way?” The Century Foundation, September 29, 2016,  https://tcf.org/content/report/student-loan-guaranty-agencies-lost-way/.
  20. See Lyman A. Glenny, “Financing Postsecondary Education in the U.S.A.,” Higher Education 5, 1976, pages103–107, https://www.jstor.org/stable/3445555.
  21. VA Administrator Donald Johnson, quoted in S. REP. 94-1243, S. Rep. No. 1243, 94TH Cong., 2ND Sess. 1976.
  22. David Whitman, The Profits of Failure: For-Profit Colleges and the Closing of the Conservative Mind (Fort Bragg, CA: Cypress House, 2021).
  23. 435 U.S. 213 (Max Cleland, Administrator of the Veterans Administration, et al. v. National College of Business, March 20, 1978).
  24. 435 U.S. 213 (Max Cleland, Administrator of the Veterans Administration, et al. v. National College of Business, March 20, 1978). “Traditional colleges . . . complained bitterly that they lacked the administrative capacity to calculate the use of Pell Grants and SEOG grants for each of their individual programs. The American Association of State Colleges and Universities testified that calculating Pell Grant and SEOG grant usage by program would require ‘far more paperwork and staff-time, since no college keeps a record of [Pell Grant] and SEOG enrollment by course. It also further discriminates against veterans, since there is no limit on the percentage of Pell Grant-SEOG students who can enroll in any course, but an 85 percent limit on veterans.’”
  25. “It’s Time to Protect Education Consumers Too,” remarks of U.S. Commissioner of Education Terrel H. Bell to the Statewide Higher Education Executive Officers, April 24, 1975, 5. Bell noted that “when there is rapid growth in any sector, there is a danger of malpractice. And, as much as we would like to attribute beneficence to the world of education, it, too, has its charlatans—the seekers of the fast buck.” See http://files.eric.ed.gov/fulltext/ED108554.pdf.
  26. The school could be placed into a status known as “limitation, suspension or termination” if more than 60 percent of students were using federal loans, the school had more than a ten percent default rate on the loans, or had an in-term withdrawal rate of more than 20 percent. “Chapter I—Office of Education, Department of Health, Education, and Welfare; Part 177—Federal, State and Private Programs of Low-Interest Loans to Students in Institutions,“ Federal Register 40, no. 32 (February 20, 1975):7596, https://drive.google.com/file/d/0B7adHdBE6w3mbGp3ZHRncW1HdzQ/view?usp=sharing.
  27. The proposals to expand student aid, which came from the Carter Administration, were responses to the congressional tax committees’ interest in enacting tuition tax credits. See Jim Stedman, “Federal Student Assistance: Legislative History, 95th Congress 2nd Session. Report No. 79-6 EPW,” Congressional Research Service, ERIC Number: ED167057.
  28. September 2022 interview with Thomas Butts, who served as deputy assistant secretary for student aid in the Carter administration.
  29. Alston Chase, “Financing a College Education,” The Atlantic, April 1980, https://www.theatlantic.com/magazine/archive/1980/04/financing-a-college-education/667659/
  30. “Timeline: The Growth of Federal Loans,” The Lumina Foundation, https://www.luminafoundation.org/history-of-federal-student-aid/chapter-one/#.
  31. It appears that some parent borrowing continued to be authorized. “Summary, Omnibus Budget Reconciliation Act of 1981,” https://www.congress.gov/bill/97th-congress/house-bill/3982.
  32. See his op-ed, “Our Greedy Colleges,” New York Times, February 18, 1987, https://timesmachine.nytimes.com/timesmachine/1987/02/18/623887.html?pageNumber=31.
  33. David Whitman, “When George H.W. Bush ‘Cracked Down’ on Abuses by For-Profit Colleges,” The Century Foundation, March 9, 2017, https://tcf.org/content/report/president-george-h-w-bush-cracked-abuses-profit-colleges/.
  34. “Higher Education Amendments of 1992” PL 102–325, July 23, 1992, 106 Stat 448,  https://www.congress.gov/bill/102nd-congress/senate-bill/1150
  35. Prior to recent reforms that exclude GI Bill funds from the 15 percent, some argued that the design actually encouraged institutions to increase tuition above aid availability in order to meet the 15 percent non-Title-IV revenue requirement. According to CRS, opponents of the 90/10 rule say colleges “adjust their prices upward to remain below the 90-percent threshold and ensure they do not fail the rule’s requirements.” https://www.everycrsreport.com/reports/R46773.html
  36. Therese Rainwater, “The Rise and Fall of SPRE: A Look At Failed Efforts to Regulate Postsecondary Education in the 1990s,” American Academic, 107–08 (March 2006), 110, https://drive.google.com/file/d/0B7aqIo3eYEUtMUlSeDFWdHFqems/view?usp=sharing.
  37. The law added, to the list of required areas for standards, “assess the institution’s . . . program length and tuition and fees in relation to the subject matters taught and the objectives of the degrees or credentials offered.”
  38. Since accrediting agencies are associations of colleges, the colleges would potentially be agreeing on prices. 119 F.T.C. 977, Accrediting Commission on Career Schools and Colleges of Technology, P944015, January 19, 1995, https://www.ftc.gov/system/files/documents/advisory_opinions/advisory-opinion-concluding-proposal-adopt-enforce-certain-accrediting-standards-tuition-fees-would/letter_to_accrediting_commission_on_career_schools_and_colleges_of_technology_-_decisions_volume_119.pdf.
  39. Report of the Commission, 1998, https://files.eric.ed.gov/fulltext/ED416762.pdf.
  40. 1998 HEA Reauthorization bill, as enacted, https://www.congress.gov/bill/105th-congress/house-bill/6. The reauthorization also directed NCES to undertake a study of changes in tuition over time, and the factors behind the changes (with a particular interest in the impact of institutional financial aid). NCES published a two-volume report in December 2001: “Study of College Costs and Prices, 1988-9 to 1997-8,” National Center for Education Statistics, U.S. Department of Education, https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2002157.
  41. “A Congressional Analysis of College Costs and Implications for America’s Higher Education System,” by Rep. John A. Boehner (R-OH), Chairman, U.S. House Committee on Education and the Workforce Rep. Howard P. “Buck” McKeon (R-CA), Chairman, U.S. House Subcommittee on 21st Century Competitiveness. https://eric.ed.gov/?id=ED479752
  42. Stephen Burd, “Rep. McKeon’s Plan to Penalize Colleges for Steep Tuition Increases Is Criticized in Hearing,” Chronicle of Higher Education, September 24, 2003, https://www.chronicle.com/article/rep-mckeons-plan-to-penalize-colleges-for-steep-tuition-increases-is-criticized-in-house-hearing/.
  43. “The College Cost Crisis Report: Are Institutions Accountable Enough to Students and Parents,” hearing before the subcommittee on 21st Century Competitiveness of the Committee on Education and the Workforce, U.S. House of Representatives, September 23, 2003, https://www.govinfo.gov/content/pkg/CHRG-108hhrg90138/html/CHRG-108hhrg90138.htm
  44. Greg Winter, “House GOP to Drop Idea of Penalty for Steep Rises in Tuition,” The New York Times, March 3, 2004. https://www.nytimes.com/2004/03/03/us/house-gop-to-drop-idea-of-penalty-for-steep-rises-in-tuition.html
  45. R. M. Zemsky, “The Rise and Fall of the Spellings Commission,” Chronicle of Higher Education, January 26, 2007, https://repository.upenn.edu/gse_pubs/47.
  46. “A TEST OF LEADERSHIP: Charting the Future of U.S. Higher Education,” A Report of the Commission Appointed by Secretary of Education Margaret Spellings, September 2006,  https://files.eric.ed.gov/fulltext/ED493504.pdf.
  47. Unfortunately, those measurement efforts turned out to be wasteful, at least as implemented. See Molly Worthen, “The Misguided Drive to Measure ‘Learning Outcomes,” The New York Times, February 23, 2018, https://www.nytimes.com/2018/02/23/opinion/sunday/colleges-measure-learning-outcomes.html.
  48. Robert Shireman, Learn Now, Pay Later: A History of Income-Contingent Student Loans in the United States. The Annals of the American Academy of Political and Social Science, 671(1), 2017, 184–201, https://doi.org/10.1177/0002716217701673.
  49. Higher Education Opportunity Act; see https://www.govinfo.gov/content/pkg/PLAW-110publ315/html/PLAW-110publ315.htm.
  50. “College Affordability and Transparency Lists,” NAICU, https://www.naicu.edu/research-resources/federal-tool-guide/college-affordability-and-transparency-lists.
  51. Incentives and rewards for low tuition, 20 U.S. Code § 1161m.
  52. D. J. Baker, “‘Name and Shame’: An Effective Strategy for College Tuition Accountability?” Educational Evaluation and Policy Analysis, 42(3), 2020, 393–416, https://doi.org/10.3102/0162373720937672.
  53. The “Gainful Employment” condition in the Higher Education Act applied only to those programs and institutions.
  54. Robert Shireman, “Profits Put Students at Risk. A Gainful Employment Rule Will Protect Them,” The Century Foundation, May 15, 2023, https://tcf.org/content/report/profits-put-students-at-risk-a-gainful-employment-rule-will-protect-them/#c3.
  55. Final Rule, Program Integraity and Gainful Employment,  https://www.federalregister.gov/documents/2019/07/01/2019-13703/program-integrity-gainful-employment.
  56. Final Rule, Program Integrity and Gainful Employment, https://www.federalregister.gov/documents/2023/10/10/2023-20385/financial-value-transparency-and-gainful-employment
  57. Guidance issued on January 17, 2025, reopened data submission until mid-February. See FSA Partners, U.S. Department of Education, https://fsapartners.ed.gov/knowledge-center/topics/financial-value-transparency-and-gainful-employment-information.
  58. Dylan Matthews, “Everything you need to know about Obama’s higher ed plan,” The Washington Post, August 22, 2013, Everything you need to know about Obama’s higher ed plan – The Washington Post.
  59. Mike Konczal, “Can Obama Really Rein In College Costs?” Salon, September 6, 2013, https://www.salon.com/2013/09/06/can_obama_really_reign_in_college_costs/.
  60. College Score Card, U.S. Department of Education, https://collegescorecard.ed.gov/.
  61. John Cheslock, “Examining Instructional Spending for Accountability and Consumer Information Purposes,” The Century Foundation, February 28, 2019, https://tcf.org/content/report/examining-instructional-spending-accountability-consumer-information-purposes/.
  62. Stephanie Hall, “How Far Does Your Tuition Dollar Go?,” The Century Foundation, April 18 2019, https://tcf.org/content/commentary/how-far-does-your-tuition-dollar-go/.
  63. The bill, H.R. 1655, defined education spending as “amounts expended on instruction or instructional activities, academic support, and support services.”
  64. Senate HELP announcement, May 20, 2015, https://www.help.senate.gov/chair/newsroom/press/alexander-if-colleges-share-in-the-risk-of-student-loan-defaults-they-can-help-reduce-overborrowingand-the-cost-of-college.
  65. Kellie Woodhouse, “Does Compliance Cost $15,000 Per Student?” Inside Higher Ed, August 2, 2015, https://www.insidehighered.com/news/2015/08/03/vanderbilt-university-weighs-its-controversial-compliance-costs-report#.
  66. See for example this plan from Adam Looney and Tara Watson of the Brookings Institution: https://www.brookings.edu/research/a-risk-sharing-proposal-to-hold-higher-ed-institutions-accountable-to-their-students/.
  67. “Accountability Under the CCRA: An Analysis,” Committee on Education and the Workforce, U.S. House of Representatives, May 2, 2024, https://edworkforce.house.gov/news/documentsingle.aspx?DocumentID=410507.
  68. Robert Shireman, “Federal Efforts to Prevent Student Aid Dollars from Eroding Value and Driving Ination: An Historical Compendium,” The Century Foundation, December 8, 2023,  https://production-tcf.imgix.net/app/uploads/2023/12/06112847/Grad-Loan-Report-Appendix-final-1.pdf.

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