20 U.S.C. § 1161m — Incentives and rewards for low tuition

**(a) Rewards for low tuition** (1) **Grants** — From funds made available under subsection (e), the Secretary shall award grants to institutions of higher education that, for academic year 2009–2010 or any succeeding academic year— (A) have an annual tuition and fee increase, expressed as a percentage change, for the most recent academic year for which satisfactory data is available, that is in the lowest 20 percent of such increases for each category described in subsection (b); (B) are public institutions of higher education that have tuition and fees that are in the lowest quartile of institutions in each category described in subsection (b)(1), (b)(4), or (b)(7); or (C) are public institutions of higher education that have a tuition and fee increase of less than $600 for a first-time, full-time undergraduate student. (2) **Use of funds** — Funds awarded to an institution of higher education under paragraph (1) shall be distributed by the institution in the form of need-based grant aid to students who are eligible for Federal Pell Grants, except that no student shall receive an amount under this section that would cause the amount of total financial aid received by such student to exceed the cost of attendance of the institution. **(b) Categories of institutions** The categories of institutions described in subsection (a) shall be the following: (1) four-year public institutions of higher education; (2) four-year private, nonprofit institutions of higher education; (3) four-year private, for-profit institutions of higher education; (4) two-year public institutions of higher education; (5) two-year private, nonprofit institutions of higher education; (6) two-year private, for-profit institutions of higher education; (7) less than two-year public institutions of higher education; (8) less than two-year private, nonprofit institutions of higher education; and (9) less than two-year private, for-profit institutions of higher education. **(c) Rewards for guaranteed tuition** (1) **Bonus** — For each institution of higher education that the Secretary determines complies with the requirements of paragraph (2) or (3) of this subsection, the Secretary shall provide to such institution a bonus amount. Such institution shall award the bonus amount in the form of need-based aid first to students who are eligible for Federal Pell Grants who were in attendance at the institution during the award year that such institution satisfied the eligibility criteria for maintaining low tuition and fees, then to students who are eligible for Federal Pell Grants who were not in attendance at the institution during such award year. (2) **Four-year institutions** — An institution of higher education that provides a program of instruction for which it awards a bachelor’s degree complies with the requirements of this paragraph if— (A) for a public institution of higher education, such institution’s tuition and fees are in the lowest quartile of institutions in the same category as described under subsection (b); or (B) for any institution of higher education, such institution guarantees that for any academic year (or the equivalent) beginning on or after July 1, 2009, and for each of the four succeeding continuous academic years, the tuition and fees charged to an undergraduate student will not exceed— (i) for a public institution of higher education, $600 per year for a full-time undergraduate student; or (ii) for any other institution of higher education— (I) the amount that the student was charged for an academic year at the time the student first enrolled in the institution of higher education, plus (II) the percentage change in tuition and fees at the institution for the three most recent academic years for which data is available, multiplied by the amount determined under subclause (I). (3) **Less-than four-year institutions** — An institution of higher education that does not provide a program of instruction for which it awards a bachelor’s degree complies with the requirements of this paragraph if— (A) for a public institution of higher education, such institution’s tuition is in the lowest quartile of institutions in the same category as described under subsection (b); or (B) for any institution of higher education, such institution guarantees that for any academic year (or the equivalent) beginning on or after July 1, 2009, and for each of the 1.5 succeeding continuous academic years, the tuition and fees charged to an undergraduate student will not exceed— (i) for a public institution of higher education, $600 per year for a full-time undergraduate student; or (ii) for any other institution of higher education— (I) the amount that the student was charged for an academic year at the time the student first enrolled in the institution of higher education, plus (II) the percentage change in tuition and fees at the institution for the three most recent academic years for which data is available, multiplied by the amount determined under subclause (I). **(d) Definitions** In this section, the terms “tuition and fees” and “net price” have the meaning given to such terms in [section 1015a of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title20-section1015a&num=0&edition=prelim). **(e) Authorization** There are authorized to be appropriated to carry out this section such sums as may be necessary for fiscal year 2009 and each of the five succeeding fiscal years.