Obama Lays Out Agenda to Promote College Affordability

By Caralee J. Adams — August 22, 2013 4 min read
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President Obama hits the road today to pitch his ideas for making college more affordable with scheduled stops on campuses in New York and Pennsylvania.

The White House this morning released a preview of his new agenda that focuses on three areas of reform:

Tracking college performance. The administration would like to develop a new college-rating system before the 2015 academic year to provide students with information on schools that are the best value. The ratings would be based on access, such as percentage of students receiving Pell grants; affordability (average tuition, scholarships, and loan debt); and outcomes (graduation and transfer rates, graduate earnings, and advanced degrees of college graduates).

The rating system could be used to tie the $150 billion given each year in federal student aid to college performance, holding students and colleges that get assistance responsible for making progress toward a degree. The president would also like to encourage states to fund public colleges based on performance.

Encouraging innovation and competition.
To contain higher education costs and keep students on track to graduate, the administration is pushing for colleges to think of new options for students, including online learning, leveraging technology to provide better services, and awarding credits based on competency over seat time.

Obama’s plan also emphasizes the need to recognize students’ prior learning and to promote dual enrollment in high school and college, which can save students money by accelerating their time to degree.

Managing student debt. The president would like to allow all student borrowers to cap their federal student-loan payments at 10 percent of their monthly income, as is allowed in the Pay as You Earn plan. (Now, students who first borrowed before 2008 or have not borrowed since 2011 are not eligible for the plan.)

The administration is calling for a more aggressive effort to reach out to make young people aware of the options available to help struggling borrowers repay their debt.

Obama is scheduled to stop at the University of Buffalo, which has been recognized as a model for containing costs and expanding student access in a report by the New America Foundation on one of six “next generation” universities.

Update (11 a.m.): In a press call this morning, Cecilia Munoz, director of the administration’s Domestic Policy Council, said the president’s new proposals “to ensure all students have access to a quality, affordable education “would be a cornerstone in his larger plan to offer a better bargain for the middle class.

“It’s a bedrock principle in this country that a college education is the best ticket to middle-class prosperity and opportunity,” she said. Munoz cited data from the College Board and the U.S. Bureau of Labor Statistics showing that while tuition at four-year public colleges has tripled in the past three decades, income for the typical family has only increased by 16 percent. She also underscored the growing burden of debt that many young people face from borrowing for college.

“It’s clear that we can’t just tinker around the edges here. We have to do more,” Munoz said. “The president believes we have to fundamentally rethink how higher education is paid for in this county. He believes we should shake up the system and build on innovation.”

The new agenda contains bold reforms, Munoz said, that will not be popular with everyone, especially those who benefit from the status quo. “What [those reforms] will do is put the interest of students and middle-class families first,” she said.

The administration will be mindful of building a rating system that rewards colleges that provide access and support to disadvantaged students, Munoz added. Both public and private colleges would be included in the new system.

James Kvaal, the deputy director of the Domestic Policy Council, said Secretary of Education Arne Duncan will lead the effort to create the new rating system for college performance. He plans to engage college leaders, students, and other experts about how to set up these ratings.

Kvaal emphasized it will not be rankings, but rather a rating of schools to give students guidance about which colleges have good values and outcomes.The ratings would not reward schools that are spending more, if they are not also helping students more, he added.

“We know it’s possible to deliver a college education that is higher in quality and lower in cost,” he said.

Tying those college-performance outcomes to federal financial aid would require congressional approval. Such a move might be part of the reauthorization of the Higher Education Act, said Kvall. Pointing to the recent success with the bipartisan student-loan interest deal, Kvall and Munoz said such a proposal has the potential to garner bipartisan support.

As for colleges being subjected to the new performance ratings, Munoz said the administration has been consulting with many higher education leaders already.

“This is a conversation always taking hold,” said Munoz. “There certainly will be criticism, but hopefully, there will be a lot of input on how to design this. Leaders who are eagerly addressing cost are not afraid of transparency. We want to encourage more of that in the higher education. ... It is not unreasonable to approach this from a consumer perspective.”

Photo: President Barack Obama is cheered as he arrives to speak at the University at Buffalo, the State University of New York, Thursday in Buffalo where he began his two day bus tour to speak about college financial aid. (Keith Srakocic/AP)

A version of this news article first appeared in the College Bound blog.