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Obama’s College Affordability Plan News and Analysis

President Barack Obama announced today a sweeping set of proposals aimed at reining in the cost of attending college that would include a new rating system for institutions, tying federal aid for students and schools to student performance, and an outreach drive to enroll student loan borrowers into federal repayment programs.

The White House circulated a fact sheet  this morning that outlines the president’s  goals. Many of the president’s proposals would require congressional approval before they take off. Some, like tying student federal aid to course completion, are likely to be a hit among Republican lawmakers, but many Capitol Hill watchers are skeptical Congress can agree on a bill given its recent troubles in passing legislation.

There are several big-ticket programs embedded in the Obama administration’s plan, including a $1 billion higher education Race to the Top competition to encourage states to pare college costs and $500 million in Department of Labor funds to community colleges and four-year institutions that promise to expand certificate and degree completion among adult learners. The college Race to the Top plan was first floated in the president’s budget proposal earlier this year.  

Below is a roundup of reports and analysis from news sites and policy shops.

[Many of the proposals unveiled today will be explored in greater detail at EWA’s Higher Education Seminar, which will take place in Boston September 27-28. All interested reporters are welcome; scholarships to cover lodging and transportation expenses are available.]

News

Inside Higher Ed: “The sweeping, ambitious proposal President Obama unveiled Thursday seeks to tie all federal financial aid programs to a rating system of colleges on affordability, student completion rates and the earnings of graduates.”

Bloomberg News: “The Education Department would be directed to develop a rating system to be in place before the 2015 school year, and the president will ask Congress for legislation that would dole out financial aid based on those ratings by 2018, Obama said. While the administration could produce a ranking on its own, changes in federal aid would require congressional approval.”

New York Times: “Mr. Obama hopes that starting in 2018, the ratings would be tied to financial aid, so that students at highly rated colleges might get larger federal grants and more affordable loans. But that would require new legislation.

“‘I think there is bipartisan support for some of these ideas, as we’ve seen in states where the governors have been working on them,’ said the administration official, who spoke on condition of anonymity in order to disclose information not yet made public.”

USA Today: “The plan calls on colleges to disburse student aid over the course of a semester, rather than as a lump sum at the start. Colleges would receive bonus money for the number of Pell Grant students who graduate.

“As for the ever-growing levels of student debt, the plan calls for expansion of a ‘Pay As You Earn’ program that would cap loan repayments at 10% of income.”

Financial Times: “The proposed system was attacked as ill-conceived by John Kline, the Republican chairman of the House committee on education. ‘While I am pleased the president’s new plan [recognizes] the importance of promoting innovation and competition in higher education, I remain concerned that imposing an arbitrary college ranking system could curtail the very innovation we hope to encourage – and even lead to federal price controls,’ Mr Kline said.” 

(Note: During a morning press call with White House officials Cecilia Munoz and James Kvaal, Kvaal stressed the system would not rank colleges, but rather assign ratings based on metrics that measure completion rates, student diversity, and other factors.)

                                                [BONUS: EWA's Primer on College Affordability]

Washington Post: “But what hasn’t been emphasized before is the plan’s push to make that data accessible through a variety of sources. ‘The Department of Education will enlist entrepreneurs and technology leaders with a Datapalooza to catalyze new private-sector tools, services, and apps to help students evaluate and select colleges,’ the fact sheet promises. Whether that will actually catalyze new services students use will largely be up to those entrepreneurs and tech leaders so it’s a bit hard to predict how significant that will be.”

(Note: Earlier in the summer, President Obama signed an executive order that told all federal agencies to release data that are capable of being easily incorporated into new private sector applications and consumer tools. EWA’s article on how the executive order affects education data can be read here.)

Sacramento Bee: “The Say Yes to Education program got a hoped for plug from President Barack Obama on Thursday when he spoke about college affordability during a stop at the Buffalo campus. The president praised ‘the great work that’s being done through a program called Say Yes, to make sure that no child in Buffalo has to miss out on college because they can’t pay for it.’”

                                                [BONUS: EWA's Primer on College Completion]

Wall Street Journal: “This quest is a political winner with nearly everyone except the president’s fans among liberal college professors. In a Pew Research Center poll last year, 57% of Americans said colleges fail to provide students with good value for the money. But the rising cost of college is more than a politically appealing talking point. It’s a threat to widely shared prosperity. Rising tuition threatens to discourage all but the best-off from going to and finishing college, restraining future economic growth and widening the gap between winners and losers in the U.S. economy.

(Note: As EWA has written previously, the full cost of attending college has grown much faster than inflation and household incomes over the past two decades. Even with federal grants and other aid, tuition at public universities has risen by 50 percent, not including room and board. Meanwhile, institutional aid to students is not as sensitive to student need; recent federal data show colleges dole out a near-equal amount of aid to rich students as they do to less privileged students.)

Associated Press: “The White House chose the University of Buffalo because it is part of the State University of New York system, which the Obama administration credits as a leader in affordability and innovation. The attention to school costs comes after Obama and Congress recently cooperated on a new law governing student loans. But Obama said loan amounts aren’t keeping up with skyrocketing college costs.”

Inside Higher Ed: “The president’s proposal — mentioning such ideas as MOOCs, competency-based learning and others — identifies the administration firmly with a series of reforms that have been building in recent years, reforms that have attracted considerable attention and also considerable skepticism from some in academe. Obama is proposing to spend $260 million on a ‘First in the World’ fund that would “test and evaluate innovative approaches to higher education.” Further, the administration is promising to issue ‘regulatory waivers’ for ‘high-quality, low-cost innovations in higher education, such as making it possible for students to get financial aid based on how much they learn, rather than the amount of time they spend in class.’”

The Chronicle of Higher Education: “According to the White House fact sheet, Mr. Obama will seek to reward colleges with a bonus for the number of Pell Grant recipients they graduate, and to require colleges with high dropout rates to disburse Pell Grants over the course of the semester, rather than in lump sums at the beginning of the semester.”

(Note: During the morning press call with White House officials, EWA asked whether this proposal will conflict with how most institutions collect tuition revenue. Most students use their financial aid dollars to pay for school at the beginning of the semester in one lump sum rather than through gradual payments. A White House official said the White House plan might “require retooling” on the part of institutions in how they collect federal tuition aid from students.)


Reuters: “Andrew Kelly, director of the Center on Higher Education at the conservative American Enterprise Institute, said the president’s proposals could motivate institutions to make some changes. But he said higher education lobbyists and some lawmakers may argue such a system could create a great disparity among colleges.

“‘The political fight is going to be very interesting,’ he said.”

Opinion

New York Magazine: “Obama’s policy turn is to place his party behind a dual agenda of college affordability, including both subsidies to students and a coordinated agenda designed to increase the value of a college education.”

Washington Monthly: “The real outcome will look a lot different from what Obama proposes and it’s possible some compromises will result in very different outcomes from those intended. Rewarding colleges for higher graduation rates but not also rewarding them for enrolling more Pell students would likely cause colleges just to enroll fewer poor students, who have more trouble getting through college. Enrolling all students in “pay as you earn” programs but not providing schools with more money through Pell grants could result in massive funding shortages, for instance. But there’s a lot to work with here, and the ideas are impressive.”

New America Foundation: “Instead of providing useful information, schools report aggregate-level information on certain subsets of students (largely first-time, full-time students – the kinds of traditional students who make up only about 14 percent of the undergraduate student body today). That system, the Integrated Postsecondary Education Data System (IPEDS), is extremely limited. For example, in addition to skipping students who aren’t first-time, full-time, graduation rates in IPEDS don’t count transfer students at all, even though a primary mission at community colleges is transferring students to a 4-year institution.

Chronicle of Higher Education collected the responses of various stakeholders here.

The Institute for College Access & Success

“We applaud the President’s proposals to improve and increase awareness of federal loan repayment options, including providing all students with the assurance of manageable income-based payments and forgiveness after 20 years.  Similar benefits are already available to some recent graduates through the Pay As You Earn plan and to future borrowers in the Income-Based Repayment plan starting next July. … However, the best repayment plans cannot help borrowers who are unaware of them.  With delinquency and default rates rising, today’s announcement of targeted outreach to borrowers with high debt and showing signs of distress is urgently needed.”

Chronicle of Higher Education: “Obama needs to call out the bad actors in public higher education too—those institutions that fancy themselves private and, in doing so, discourage social mobility for those who need it most. His decision to stand at a New York State public institution today rather than at the quasi-private University of Michigan at Ann Arbor is a good one. He is standing to protect those comprehensive state public universities and their students.”



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