-Allows each university board of trustees to establish a tuition differential for undergraduate courses upon receipt of approval from the Board of Governors (Sec. 3).
-Mandates that 70 percent of the revenues from the tuition differential be used for purposes of undergraduate education (Sec. 3).
-Mandates that the remaining 30 percent of the revenues from the tuition differential, or the equivalent amount of revenue from private sources, be used to provide financial aid to undergraduate students who exhibit financial need (Sec. 3).
-Limits increased tuition differentials, combined with base tuition increases, to no more than 15 percent a year (Sec. 3).
-Limits the total sum of undergraduate tuition and fees per credit hour, including the tuition differential, to no more than the national average of undergraduate tuition and fees at 4-year degree-granting public post secondary educational institutions (Sec. 3).