News You Need to Know: Daily Roundup, Tues., Oct. 3rd

Bush Signs Bill Limiting "Eligible-Lender-Trustee" Kickback Scheme

On Saturday, President Bush signed the Third Higher Education Extension Act of 2006, H.R. 6138, into law. The extension bill authorizes programs in the existing law until June 30, 2007. There are several new provisions in this bill, including restrictions on "eligible-lender-trustee" arrangements. Universities had been hiring banks that participate in the guaranteed-student loan program to act as trustees for loans they made to students in order to avoid limits on the use of the loan-sale proceeds. Under the new bill, universities are now required to use the proceeds towards need-based grant aid.

UNC President Proposes Tuition Cap

University of North Carolina President Erskine Bowles unveiled a proposal on Monday to cap annual tuition and fee increases for in-state undergraduates at 6.5 percent per year at the 16 UNC campuses for the next four years. Bowles proposal echoes the "truth-in-tuition" plan previously suggested by the New America Foundations Education Policy Program and endorsed in a new book by former top Clinton Administration top staffers Bruce Reed and Rahm Emanuel. Bowles selected 6.5 percent because it is the average annual tuition increase since 1972. If the General Assembly gives the campuses more than a 6 percent increase in recurring funds in a particular year, the cap would be even lower. Bowles also included restrictions on how money from tuition increases can be spent. For example, 25 percent of the revenue must be used for need-based financial aid. The UNC Board of Governors will vote on the proposal next Friday.

Notable Bill Introduced on University Research

A bill proposed by Sens. Cornyn and Lieberman, the Federal Public Research Access Act, would require institutions of higher education that conduct research with federal money to publish their findings online for no charge within six months of publication in a journal. Proponents of the bill say that it will further the advancement of knowledge by making publicly-funded research available to the largest possible audience. Opponents maintain that scholarly journals and the peer-review process would be hurt, and that millions of dollars would have to be diverted from research to the maintenance of the databases.