Obama unveils broad plan to tackle rising college costs

President wants to rate colleges on performance and tie scores to federal aid

President Obama speaking on education at the University at Buffalo in New York on Thursday.
Jewel Samad/AFP/Getty Images

President Barack Obama unveiled his administration’s most ambitious set of proposals yet to rein in college costs and make higher education more accessible to students during a speech Thursday at the University at Buffalo in New York.

The centerpiece of the plan is a new ranking system that the federal government hopes to roll out in 2015, which would score colleges on metrics like tuition, average student debt, graduation rates and the percentage of low-income students who attend. Ultimately, the Obama administration hopes, pending congressional approval, to tie those rankings to the amount of federal financial aid that colleges and universities receive, penalizing schools that do not show favorable outcomes with fewer taxpayer dollars.  

"At a time when college has never been more important or more expensive, too many students are facing a choice they should never have to make," Obama said. "That’s a choice we shouldn’t have to accept."

If the proposal went into effect -- an uncertainty, given that Congress struggled to pass a far less sweeping student-loan bill this summer -- it would represent some of the biggest changes to higher-education policy in the last half century.

The current formula for determining how much federal financial aid an institution receives to distribute to students is tied only to the number of students who enroll, regardless of outcomes. Some states -- Ohio, Tennessee and Indiana, for example -- have experimented with changing that formula to make it more focused on performance, particularly graduation rates.

The Obama administration wants to expand on that idea while giving students and families a clearer picture of the value they would receive from a particular college.

"It is time to stop subsidizing schools that are not producing good results," Obama said.

In his nearly hourlong address, the president wove in stories of how higher education had helped his own family advance, noting that his grandfather went to college through the GI bill and the government helped his mother go to school while raising two children.

"We’ve got to create more pathways into the middle class for folks who are willing to work for it," he said. "The fact is that we've been spending more money on prisons, less money on college."

Ranking systems

Among those in higher education, there was praise for the Obama administration in tackling the issue of college affordability with a large-scale proposal, as well as skepticism about how such a system would work. Colleges and universities have in the past adopted unsavory practices to score better on prestigious rankings, including admitting more affluent students, who tend to perform better.  

Jamie Merisotis, president of the Lumina Foundation, a foundation that works to expand access to higher education, said the effectiveness of the proposal would be largely dependent on the details of exactly how the rankings would be formulated and then how those rankings would be used to calculate federal aid.

"Developing this kind of system will shine a spotlight on the issue of performance, and it will accelerate the idea that resource allocation should be based on performance," Merisotis said. "I don’t know a rating system is the way that you get to it."

There is no dearth of college rankings already, specifically ones based on the perceived prestige of the colleges being evaluated, said Michelle Asha Cooper, president of the Institute for Higher Education Policy, a Washington think tank.

"If we are going to a ranking system, we don't want to just re-create the rankings we already have," Cooper said. "We need to look at a ranking system that looks at value added." She believes the president's proposal may face the problem that "we don’t have consistently good data across institutions."

Robert Manuel, president of the University of Indianapolis, a private four-year institution, worries that a single ranking would not reflect the diversity of institutions in the United States, ones that serve nontraditional as well as traditional students.

"I don’t mind the college-ranking system at the federal level," he said. "I mind if we end up being judged by a single measure, and if we have to put so much effort into producing data that we take our focus off of the mission of educating our students."

Obama said Secretary of Education Arne Duncan would work with stakeholders across higher education, from college presidents to families to policymakers, in the coming months to develop the best metrics and scorecard to address such concerns.

'Devil in the details'

Lawmakers have shown more of a penchant for compromising in higher education than in some other arenas. In fact, the 2012 GOP platform called for providing students and families with more information on "completion rates, repayment rates, future earnings and other factors."  

Still, Rep. John Kline, R-Minn., chairman of the House Education & the Workforce Committee, expressed concern that the new ranking system would be "arbitrary" and used to level "federal price controls."

"As always, the devil is in the details," he said.

Obama also proposed expanding eligibility for the program that allows all student borrowers to cap their educational loan repayments at 10 percent of their monthly income; creating a $1 billion "Race to the Top" higher-education competition to encourage institutions to improve outcomes; and tying financial aid to progress toward graduation for students.

The administration’s proposals come at a time when higher education confronts the intertwined challenges of expanding access, particularly to more minority and low-income students, improving graduation rates and taming what some have termed the runaway costs of a college education.

As states have struggled to balance their budgets and distributed fewer dollars to colleges and universities, institutions have passed the bill onto students and families, even as incomes remain stagnant. On average, students graduate with approximately $26,000 in debt.

Other alarming statistics abound. The Georgetown Public Policy Institute estimates that the nation will be short 3 million college graduates by 2018 if current trends persist. Moreover, only 58 percent of full-time students who began working toward a bachelor’s degree in 2004 at a four-year institution had graduated in six years, according to the National Center for Education Statistics. That figure dropped to 50 percent for Latinos and 39 percent for African-Americans.

Nonetheless, it is universally acknowledged that a college degree is the foundation of economic mobility, particularly for low-income students.

Al Jazeera

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