Higher education legislation passed Thursday by the House includes language that advocates of "fair use" of copyrighted material claim might imperil the federal financial aid of students at schools that do not monitor file-sharing on campus.

Buried in the almost 800-page College Opportunity and Affordability Act, which is aimed at lowering tuition costs and streamlining student aid application processes, is text that critics believe is an attempt by Hollywood to force schools to monitor their networks.

One provision requires colleges to publicize their policies on illegal file-sharing and another orders them to report those policies annually to the Education Department.

Both would be written into universities' contracts with the agency that let them take part in federal loan programs and were included in a companion bill the Senate passed in July.

Under the law, colleges are required to develop strategies for addressing other illegal activities that occur on campuses, like underage drinking, said Rachel Racusen, an aide to House Education and Labor Chairman Miller.

Two other components of the bill that are not tied to financial aid eligibility ask schools to develop plans to deter illegal downloading and offer students alternative, legal ways of swapping content.

The bill does not dictate what schools' plans should look like, nor does it ask them to report individual student copyright violations, she said.

But the Digital Freedom Campaign, which is backed by the Consumer Electronics Association, the Electronic Frontier Foundation, Public Knowledge and others, urged lawmakers "to consider common sense and not allow special interests to hold universities and their students hostage."

"Requiring universities to spy on their students is an insult to the transparency and openness that is the cornerstone of the academic community," added Steve Worona, policy director for Educause, a group that represents college and university network operators. "Universities are educators, not corporate enforcement tools," he said.

The Copyright Alliance, which represents Microsoft, NBC Universal, News Corp., Time Warner and other content giants, sent a letter to House Speaker Pelosi Wednesday supporting the language. The bill helps fight piracy "without placing undue burdens on our higher education system," the group said. "

With access to ultra-fast networks and limited administrative oversight, it is not surprising that so many students at U.S. colleges and universities have begun helping themselves to unauthorized works found online," the letter said.

The economic impact of that activity has been called into question.

Last month, the Motion Picture Association of America announced an investigation into inaccuracies in a report that said college students were to blame for as much as 44 percent of the movie industry's annual losses.

The MPAA, which used the study as part of its anti-piracy campaign on Capitol Hill, now believes the number is closer to 15 percent.

Nevertheless, MPAA spokeswoman Angela Martinez said piracy costs over 100,000 American jobs annually and her group is glad the issue was addressed in the education bill.

The MPAA will work with universities "to educate students about the consequences of piracy, find solutions that will help reduce piracy on campus networks," she said. By Andrew Noyes