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Letter to Rep Boehner regarding HEA

March 5, 2003

March 5, 2003

The Honorable John A. Boehner
U.S. House of Representatives
Washington, D.C. 20515

Dear Mr. Boehner:

I am writing to you as Chairman of the Committee on Education and the Workforce in response to the Committee’s request for recommendations for the next reauthorization of the Higher Education Act. The National Association of College and University Business Officers (NACUBO) appreciates the opportunity to provide comments and recommendations on changes that our members consider important in strengthening the HEA.

More than 2,100 colleges and universities are members of NACUBO. The primary representatives of these institutions are the chief business, financial, and administrativeofficers. These individuals advise NACUBO in its development of public policy positions and support our advocacy on their behalf for fair and equitable treatment of their institutionsunder federal, state and local laws and regulations, particularly requirements that address financial administration and management of the colleges and universities for which they are responsible.

NACUBO endorses the higher education community’s reauthorization recommendations submitted by the American Council on Education. We support the recommendations that seek to increase access to higher education for low-income students by strengthening support for grants and early intervention programs, particularly the Pell Grant program; improve terms and conditions of student loans; and reduce regulatory burden on colleges and universities participating in the Title IV student assistance programs. We also support preservation of the current decentralized system of higher education accreditation that has successfully facilitated institutional reviews to ensure and improve academic quality and public accountability for more than 50 years.

The attached document provides additional commentary and recommendations that are important to NACUBO members in the reauthorization discussion and relate primarily to the administration and financial management of colleges and universities. We consider our recommendations complementary to the community letter.

We look forward to working with members of the Committee on Education and the Workforce and the Subcommittee on Twenty-First Century Competitiveness throughout the reauthorization process and thank you for considering our recommendations and comments.

Please contact Christine Larger at   (202) 861-2571   if you have questions about our letter or would like more information about NACUBO.

Sincerely,

James E. Morley, Jr.
President

Cc: Roderick R. Paige
Bill D. Hansen
Mark A. Olson
Christine E. Larger

Recommendations for the Reauthorization of the Higher Education Act to the U.S. House of Representatives Committee on Education and the Workforce

PART I. ENSURING ACCESS TO HIGHER EDUCATION

Federal, state, and institutional commitments to providing student assistance are vital to the nation in helping maintain access to higher education in the United States. At present, all sectors are constrained financially, with prospects for a swift economic recovery unlikely in the near future.

Nevertheless, a record number of students are expected to graduate from high school during the next decade. Many of these students will be academically prepared for college, but without the necessary financial resources. These students will increasingly represent under-served groups and come from lower-income families. If the promise of the No Child Left Behind legislation is to be fully realized, these students need the resources to achieve their academic goals.

Recommendation: NACUBO recommends significant increases in the federal grant programs to ensure access to postsecondary education, increase persis-tence, and ultimately, to help stimulate the economy. The federal, state, and institutional partnerships should be preserved and expanded. Maximum award levels should be increased in the Federal Pell Grant, Leveraging Educational Assistance Partnership Program (LEAP), and Federal Supplemental Educational Opportunity Grant (FSEOG) programs.

During the past two decades we have seen significant growth in the use of federal student loans and, more recently, private loans to help pay college expenses. NACUBO is concerned about the grant/loan imbalance that has developed during this period, and the recent increase in the use of alternative loans to bridge the gap between available federal loan borrowing amounts andeducational expenses. As a result, NACUBO supports increases in both federal grant and loan programs.

NACUBO supports the higher education community’s reauthorization recommendations for increased loan limits. And, as the ACE letter suggests, we ask Congress to take a close look at the loan limits to determine appropriate levels for the next five years, specifically, until the next reauthorization. We are concerned that the community proposal to raise borrowing limits may not provide sufficient resources to meet the need of the many students who depend on the Title IV student loan programs for access to higher education.

NACUBO does not have an alternative method for recalibrating the current federal student loan limits Appendix A provides brief descriptions of measures of inflation that you may want to consider in making adjustments to the federal student loan limits. One of these indicators may serve as an acceptable statistical basis for adjusting student loan borrowing levels for the next several years or lead to the development of a new statistical method for bringing the loan limits up to date.

Recommendation: NACUBO advocates increases in both the annual and cumulative loan limits for the Federal Family Education Loan (FFEL) and William D. Ford Direct Loan programs. We also ask Congress to assess alternative approaches to raising loan amounts to provide adequate financial aid to college students.

PART II. REGULATORY REFORM

Administrative Burden and Cost. In 1998, members of the National Commission on the Cost of Higher Education named government regulation as one of six major "Cost and Price Drivers" in higher education—the others were financial aid, people, facilities, technology, and expectations. The commission’s report, Straight Talk about College Costs and Prices, noted the rapid growth in recent years of the number and types of regulations with which colleges and universities have been asked to comply at their own expense. The report also noted that in recent years, costs re-lated to institutional accreditation have grown as have the number of accrediting bodies, in particular, specialized ones. The Higher Education Amendments of 1998 contributed even more to administrative cost and burden for Title IV institutions via increased regulation and reporting requirements despite the concerns raised by commission members.

The implementation of a new regulation significantly adds to institutional administrative burden and generally results in increased labor cost and expense. Major costs include:

  • Increased administrative hours and personnel;
  • Staff development and training;
  • Establishment of new accounting, record keeping, and reporting systems and proce-dures; and
  • Costs associated with purchasing information technology expertise and solutions to help create computer programs or entirely new systems to support specific data and information collecting activities.

At present, the only standard used by Department of Education to measure institutional burden is limited to an estimate of the hours needed to report the outcomes of compliance activities. This approach obviously does not take into account the majority of costs associated with complying with new program requirements.

It is important to note that implementation of a new regulation places a strain on institutional budgets and that the incremental costs associated with compliance result in reduced services or increased costs for students. Too often, unbudgeted costs result in the reduction or delay of ser-vices. For institutions that have pared their budgets down to the bone in recent years and have implemented a host of cost reduction measures, the cumulative effect of increased compliance costs can lead to reducing access, decreasing the quality of education services, or both. When there are few resources available to operate an institution effectively, these costs are passed on to students in the form of increased tuition and fees.

We strongly believe that there are many effective ways to reduce the burden of complying with the overly complex Title IV regulations. Instead of amending or appending more complicated, confusing, lengthy, and irrelevant layers to the existing rules, why not step back and take a fresh approach, i.e. one that takes into account the intent of the law, resulting in a new, updated and more focused interpretation of the law? The outcome could result in great cost savings for all stakeholders in the programs and free up scarce resources to assist prospective and enrolled students.

Recommendation: NACUBO supports continued efforts such as the recent Fed.Up Initiative that streamline the student aid regulations and reduce administrative cost and burden. NACUBO supports the proposal from the National Association of Independent Colleges and Universities (NAICU) that would establish expert panels to review the current regulations. These experts would be asked to offer recommendations on how to streamline and improve the regulations.

Differential Regulations. Colleges and universities in the U.S. are highly diverse institutions in terms of size, control, mission, academic program and degree offerings, location and other factors. When statutory changes necessitate the imposition of additional regulations, the Department of Education takes one of two approaches—differential or "one-size-fits-all" rulemaking.

The first approach—regulations that are specific to categories of institutions—often makes sense when the intended outcome can neither be the same nor made naturally comparable for all in-stitutions. An excellent example of this approach was taken by the Department of Education in the development of the Title IV financial responsibility regulations. After several failed attempts to develop a single performance measure for all types of schools, the decision was made to separate the requirements for public colleges and universities from their independent counterparts. The rationale was based on the different accounting standards required of each category of institutions. NACUBO was pleased to help substantiate the significant differences in the two sets of accounting rules and contribute to making the final results reflect the differences in the regulated community.

The second approach—"one-size-fits-all"—is the most frequently used, yet may ultimately be the least effective and costliest for the majority of institutions to implement. Generally, the uniform approach to rulemaking results in making artificial adjustments and judgments in seeking common ground among the different sectors. One unfortunate consequence can be that the final rule is based on a compromise grounded in theory but not in reality. A great disservice is done to all stakeholders when every institution must find a way to comply with a standard that is not natural for any group.

The situation is further exacerbated when it appears that selected regulations applied to all institutions are the government’s response to noncompliance by a specific group of under-performing institutions. We would rather see the Department of Education strengthen its enforcement of current rules than continue to regulate to the lowest common denominator.

Recommendations: NACUBO recommends that Congress instruct the Secretary of Education to examine the feasibility of using differential approaches to regulating higher education institutions that take into account overall institutional performance in the Title IV programs. Further, we request that Congress require ED to present data to demonstrate the need for additional requirements and their applicability to the regulated sectors. NACUBO recommends that a uniform approach only be considered when the participation of all institutions is required to remedy a problem.

Rulemaking Process. NACUBO recognizes the benefits that can be derived from activities such as negotiated rulemaking. We also believe that it is imperative that representatives of the regulated community participate in the development of regulations based on amendments to the Higher Education Act. NACUBO has appreciated the opportunity to represent college and university business and finance officers by serving on several recent negotiated rulemaking teams.

NACUBO strongly believes that individual negotiators should be chosen from a select group of individuals who are nominated by the national higher education associations and represent the various stakeholders in the regulated community. We believe that the associations are in the best position to identify the most knowledgeable individuals to serve as negotiators. Further, we find that experience in federal policymaking, familiarity with the HEA statute, knowledge of relevant campus operations, and a broad understanding of the Title IV programs and ED’s regulatory machinery constitute the most important criteria in negotiator selection. These qualities may be found among association policy staff as well as institutional representatives. NACUBO’s approach has often been to team a national office staff expert with a senior campus business officer who is selected based on expertise with the programs and institutional processes being considered in the negotiations.

Recommendation: NACUBO recommends that Congress require the Secretary of Education to seek recommendations from the higher education associations of individuals to represent the community on negotiated rulemaking teams.

Opportunities for Public Comment. NACUBO is concerned that members of the regulated community do not have sufficient time to review, analyze and respond to the Department of Education’s notices of proposed rulemaking.

Recommendations: NACUBO suggests that Congress instruct the Department of Education to provide 60 days for public comment on NPRMs. An exception would be to provide a 45-day comment period for relatively simple, straightforward, and non-controversial changes to the regulations. NACUBO also recommends that Congress urge ED to hold public meetings around the country to discuss its plans for implementation of major public policy changes such as key outcomes of the reauthorization of the Higher Education Act.

Remedies for Noncompliance. NACUBO believes that more information should be made available to institutions about compliance problems with the Title IV regulations. If more institutions are alerted to problem areas, they may be able to resolve potential problems on their own and thereby come into compliance. Given the complexity and myriad regulations, it is not surprising that some regulatory provisions are misinterpreted or overlooked by institutions. The Department of Education should develop an approach to information-sharing that yields higher levels of conformity with the rules. It does not seem effective or cost efficient to withhold information about major issues of compliance and engage in multiple negotiations of the same issue when it could be addressed more openly and yield greater returns.

Recommendation: NACUBO urges Congress to direct the Secretary of Education to identify common and/or widespread areas of noncompliance and bring these to the attention of all Title IV participating institutions. The Web site, training programs, higher education association media, and other tools would all provide an infrastructure for disseminating the information and helping institutions understand their programmatic responsibilities.

Regulatory Relief. NACUBO is very appreciative of Congressman Howard McKeon’s Fed.Up Initiative as a way to identify, review, and reduce regulatory burden in the Title IV student aid program. We also value Representative McKeon’s legislation that took many of NACUBO’s recommendations into account. We are encouraged by the recognition of members of the Committee on Education and the Workforce that regulatory reform is needed to improve these important federal student aid programs. And, we are hopeful that these themes will prevail in the Committee’s deliberations over the 2003 reauthorization of the Higher Education Act. Our members continue to support the changes presented in NACUBO’s letter to Congressman McKeon on July 20, 2001 that were not addressed in the Fed.Up legislation as exemplified in our recommendations that follow.

Recommendations: (1) NACUBO proposes simplifying the rules governing the return of Title IV funds. The current rules are overly complex and do not serve low-income students well. (2) NACUBO recommends a review of campus crime reporting requirements to develop clearer, more understandable information for students about campus crime.

NACUBO would ultimately like to see a major transformation in the Department of Education’s approach to regulation and related compliance activities. A more streamlined approach that rewards institutions for exemplary performance would allow the Department of Education to reduce its administrative costs and redirect resources to more significant acts of noncompliance and cases of fraud and abuse. An example would be to provide waivers from certain disbursement rules to institutions with low default rates. Until September 30, 2002, institutions with cohort default rates below 10% were permitted to disburse loans in single installments rather than multiple installments and were exempted from the 30-day delayed disbursement rule for first-year, first-time borrowers. We are hopeful that members of the Committee on Education and the Workforce will concur with our recommendations.

PART III. INSTITUTIONAL ACCOUNTABILITY

Colleges and universities are highly regulated organizations that are subject to a vast number of evaluation mechanisms. Institutions of higher education are—

  • Responsible to accrediting organizations for the soundness of the full scope of their op-erations—from student achievement to fiscal stability to physical plant;
  • Subject to oversight by government agencies concerning issues of taxation, employment practices, public health and safety, environmental protection, federal grants and contracts, and many other areas of federal regulatory review and compliance;
  • Accountable to states through licensure or approval processes as well as all other applicable state laws;
  • Accountable to state legislatures and local governments as recipients of state funding and/governance and
  • Responsible to the Department of Education for maintaining standards of fiscal viability, administrative capability, appropriate stewardship of federal funds, and compliance with many other regulations that are required of participants in the Title IV student aid programs.

Fiscal Accountability. Colleges and universities are required to demonstrate their fiscal accountability in a number of ways. Several Department of Education requirements mandate the disclosure and certification of financial information. Institutions provide financial statements and audit reports and report IPEDS data on finances and expenditures each year to ED. In addition, reports on the management of Title IV funds are submitted on a regular basis.

We believe that the Department of Education asks for more financial data than it can manage and analyze, which may hinder efforts to uncover serious problems such as fraud and abuse in the Title IV programs. NACUBO suggests that the burdens placed on both colleges and universities, and ED, by various and redundant submissions of institutional data could be substan-tially reduced without jeopardizing accountability. In fact, we see great potential for ED to enhance its analysis of institutional finances, identify problem areas, and assist institutions in increasing their accountability where findings suggest that improvements are necessary.

NACUBO does not support the development of any additional accountability requirements related to college and university finances at this time. We believe that the vast amount of financial data provided to ED by colleges and universities under current statutory and regulatory requirements of the HEA are sufficient to determine institutional fiscal accountability.

Recommendation: NACUBO recommends that Congress ask the Secretary of Education to conduct an internal review of all financial data and information collected by various units and offices of the ED and report its findings to the House Committee on Education and the Workforce.

Cost Management. Continuous quality improvements in institutional management, productivity, and operational effectiveness combined with process improvement and resource enhancement are core values for college and university business officers. These issues are central to NACUBO’s mission. We promote the sharing of information about successful innovations and these efforts take center stage at our annual meetings, workshops and seminars and serve as the focus for much of our research, publications, and Business Officer magazine articles. These same values are shared by our four regional associations—the Eastern Association of College and University Business Officers, the Central Association of College and University Business Officers, the Southern Association of College and University Business Officers, and the Western Association of College and University Business Officers.

We believe that college and university business officers are aware and eager to manage their costs as effectively and efficiently as possible. Over the past decade we have seen significant cutbacks in administrative expenses and resources on the campus. Volunteer members and staff frequently consult with college and university administrators around the country to share information and learn about new approaches to achieving cost savings. Unfortunately, cost cutting measures alone are not enough to save many institutions, particularly public colleges and universities, from having to make serious decisions in the face of major cuts in state budgets and appropriations that will affect access and the quality of their education programs.

NACUBO has worked extensively in trying to bring higher education management organizations together. Through the Council of Higher Education Management Associations (CHEMA), we encourage collaboration among its more than 30 association members. These organizations include experts in various fields of institutional management and business operations including physical plant administrators, telecommunications administrators, chief information officers, risk managers, and security officers, among others.

We believe that institutions of higher education seek to deliver the best education they are able to provide in the context of available resources. NACUBO publications span a wide variety of management innovations, strategies, and best practices in the several areas such as total quality management programs; organizational restructuring; and streamlining and consolidating administrative and business processes. It is important that ED recognize, encourage, and contribute to helping institutions improve the quality of higher education programs and services.

NACUBO encourages programs and awards that recognize institutional excellence in resource management. In the past NACUBO has awarded institutional achievements in these fields based on performance criteria such as institutional benchmarking; student and customer satisfaction and retention; productivity and operational effectiveness; and public accountability and responsiveness.

Recommendation: NACUBO asks Congress authorize the Secretary of Education to establish a national awards program that recognizes excellence and best practices in the management and administration of colleges and universities. We also recommend that Congress include as a program requirement the establishment of a clearinghouse of information about successful cost reduction strategies for institutions of higher education and make the information available on its Web site.

PART IV. INCREASE AWARENESS ABOUT THE VALUE AND AFFORDABILITY OF HIGHER EDUCATION

The Value of U.S. Higher Education. NACUBO supports the recommendation of the American Council on Education for a national campaign to increase awareness of the value of higher education to the nation. It is extremely important that the Secretary of Education as the chief spokesperson for higher education in the federal government publicly recognize the significance of higher education and its contributions to the world, the nation, public and nonprofit communities, and the many industries and enterprises that make the U.S. a great country. So many American competencies and values—intellectual, cultural and economic—are nurtured and developed in institutions of higher learning.

Just as capital investments in the nation’s infrastructure are necessary, we must also make investments in human capital through higher education to enhance our intellectual power and prowess. We believe it is important to educate elementary and secondary students and citizens of all ages and from all backgrounds about the many benefits of higher education and the opportunities for lifelong learning. Individuals need more information and encouragement to pursue postsecondary education.

It is also important to remind the public about the contributions colleges and universities make beyond education. From an economic perspective, institutions of higher education stimulate regional and state economies by generating jobs, attracting and helping create new businesses, and increasing state tax revenues in addition to providing a well-educated workforce. And, academic research has driven economic progress in the U.S. over the last century.

It is important that the administration share information with the public about the availability of higher education opportunities. And, as part of the message, to make clear that opportunities for a college education are available to all regardless of an individual’s socioeconomic background.

The Affordability of U.S. Higher Education. Research has consistently demonstrated that Americans badly overestimate the price of a college education and underestimate the amount of financial assistance that is available to help them meet college expenses. Low-income and minority groups are especially likely to misjudge the price of higher education and the availability of financial aid. Inaccurate information leads to uniformed decisions. In the case of higher education, it leads some individuals to write-off higher education because they "know" that it is unaffordable.

Price Affordability. Students from low-income families experience the greatest difficulties paying for college and it is important that viable options be provided by increasing federal student grant and loans to reasonable levels that will ensure all students will have access to higher education. Many affordable options are available to students regardless of their economic status or their parents’ income.

The College Board reports in its annual survey of colleges, Trends in College Pricing, that for the current academic year (2002-2003) "about 38 percent of undergraduate students attending four-year colleges and universities full-time are at institutions charging less than $4,000 in tuition and fees, and almost 70 percent face tuition charges of less than $8,000." The table below provides information on the average (enrollment-weighted) tuition and fees for undergraduate students in 2002-2003.

Tuition & Fees

Room & Board

Full-time enrollment

(dollars)

(dollars) students (% of total)

Two-year public institutions

$1,735 No data 1,707,552 (24%)

Two-year private institutions

9,890 $5,327 20,190 (>1%)

Four-year public institutions

4,081 5,582 3,721,202 (52%)

Four-year private institutions

18,273 6,779 1,747,885 (24%)


Note: Data are based on published prices.
Source: The College Board, Trends in College Pricing, 2002

It is important to point out that these data are based on annual published tuition and other educational expense rates and do not show the net price or actual amount students pay after student aid is awarded. Also, the price charged for all student expenses related to paying for an undergraduate education does not cover the full cost the college or university incurs in delivering the education. Students, regardless of the type or control of the institution they attend or receipt of financial aid, typically receive a general subsidy.

Cost/Price Confusion. As the National Commission on the Cost of Higher Education reported in 1998, there is great confusion about the terms cost, price, and general subsidy. They noted specifically that the term "cost" is used interchangeably to mean at least four different things: it can mean the production cost, or cost of delivering education to a student; it can mean the "sticker" price or posted nominal price students are asked to pay in tuition and fees; it can describe thecost to the student to attend college; and finally it can mean the net price paid by the student after financial aid awards are subtracted from the full cost to the student.

The Commission chose to define these terms not just as a "technical side note, of interest only to policy analysts" but to respond to the "major semantic challenge" that exists in the national discussion of college costs. It is important that these terms and their meanings be clearly defined for the public to present clear and consistent data about college costs and prices. NACUBO highly recommends that the Department of Education ask Congress to adopt the commission’s definitions of cost, price and general subsidy and use the terms in discussions and materials that provide information about "college costs."

Certainly a strong message about affordability and access to higher education is important for all prospective students including adults and lifelong learners. But it is particularly critical that elementary and secondary school students, their teachers, school administrators, and parents receive information throughout the K-12 years about higher education affordability and access. It is also important to clarify the meanings of the terms cost and price used in the dissemination of the information to promote a common understanding of them.

The aspirations of children and their parents depend on knowing that opportunities to attend college exist for everyone regardless of their financial status and that there are many ways that the education can be financed. We need a national mantra about higher education that breaks through the information barriers, especially as the nation’s college age population—and the proportion of students coming from low-income families—continues to increase.

Recommendation: NACUBO recommends that Congress authorize the Secretary of Education to conduct a large-scale public affairs initiative that highlights the importance of higher education, uses a common set of terms and definitions, publicizes the availability of student financial aid, and provides resources for obtaining information and assistance in pursuing a college education.

PART V. RECOMMENDATIONS FOR NEW INITIATIVES

NACUBO has considered several new concepts that may benefit higher education and would be appropriate for consideration under the HEA reauthorization.

Shared Services Delivery Demonstration Project. NACUBO recommends that Congress authorize NACUBO’s proposal for the Department of Education to conduct a demonstration project on "Shared Services Delivery." We believe that this project would improve the efficiency of the federal student aid delivery system. The project would employ "top-of-the-curve" technological concepts improve web services and systems protocols as well as the hardware and software to deliver Title IV programs more efficiently and cost-effectively. The project would target identifiable, measurable cost savings of delivering Title IV programs on campus, e.g., loan disbursement. A pilot group of institutions would be selected to apply innovative technology solutions enabling them to share the cost of these transactions. The expected outcomes are reduced costs, increased efficiency in delivery programs, and a model that could serve as a prototype for all institutions that participate in Title IV programs.

Technology Endowment Challenge Grant Program. NACUBO recognizes the technology in-frastructure needs of colleges and universities that serve predominantly low-income and underserved groups of students. NACUBO recommends that Congress authorize the Secretary of Education to establish a performance-based endowment grant program that would tie investment earnings to technology improvements at institutions with the greatest need of developing long-term investment income. The program would help institutions learn to raise and manage endowment funds, while investing endowment income in a vital element: technology for the education delivery process. We believe that this program would help strengthen HBCUs, HSIs and TCUs by promoting technology infrastructure improvements. The program would be available to accredited institutions of higher education that provide undergraduate education programs to traditionally underserved populations and have minimal endowments. Eligible institutions would receive matching grants at a 1:1 ratio from the federal government up to a certain amount.

Facilities Inventory. NACUBO believes that the beginning of the new century is a natural time to take an inventory of campus facilities. The National Center for Education Statistics (NCES) has not surveyed higher education institutions about their physical facilities in more than 30 years. Our nation’s educational and research facilities represent an enormous investment, far exceeding the value of all educational endowments combined. This is an important measure of the size of our enterprise, and the cost of maintaining and modernizing facilities is a significant drain on resources.

Research by APPA and NACUBO in the late 1980s and mid-90s showed that colleges and universities face an enormous deferred maintenance backlog. A comprehensive facility inventory by type, capacity, age, and usage is important to policy decisions that impact the ability of colleges and universities to continue to meet the educational needs of the nation.

NACUBO recommends that Congress authorize the Secretary of Education to conduct a comprehensive survey of campus facilities to quantify the size of college and university capital investments, analyze growth patterns in the last 30 years, and provide benchmarks for space utilization. An NCES inventory would also facilitate a much needed analysis of the age and condition of higher education facilities, and future needs for modernization.

Appendix A

Standard Statistical Measures of Inflation, College Costs and Prices 1

Consumer Price Index--All items index. The All Items index is the most commonly used measure of inflation. The index measures the average change in the cost of a fixed group of goods and services purchased by consumers each month. The relative importance of the college tuition and fees component is about one percent. The CPI measures the aver-age purchases of all consumers including those that do not "purchase" higher education for themselves or their children.

Consumer Price Index--College tuition and fees index. This component of the CPI measures expenditures for undergraduate and post-graduate studies at degree-conferring institutions. The index does not include room and board, books and supplies, transportation, and other student expenditures related to attendance.

Higher Education Price Index. The former U.S. Office of Education developed the HEPI index in 1975. The index reflects the price level of goods and services colleges and universities purchase for current education operations, excluding research. It uses a "fixed basket" approach and includes salary and wage data, fringe benefits, contracted services, utilities and other purchased goods and services.

College Board Trends in College Pricing Data. Each year the College Board reports in Trends in College Pricing statistics on the pricing of U.S. public and private nonprofit postsecondary institutions based on its Annual Survey of Colleges. These data are widely used to examine college prices and changes over time. Institutions report their sticker price (or tuition and fees) that they publish for the beginning of an academic year. Averages and rates of change for direct charges are reported on weighted (for enrollment) and unweighted bases. These data are often compared with the Consumer Price Index.

Forthcoming: "Higher Education Market Basket". The Higher Education Amendments of 1998 asked the Bureau of Labor Statistics (producer of the CPI) to develop a higher education "market basket" that identifies the components of college costs. A report was due to Congress by September 30, 2002, but has not been submitted to date.

1 See recommendation on page 2 related to increasing loan limits based on inflation.