Devil’s In Details of Obama Plan to Punish Pricey Universities

Tim Goral's picture

When Southern Illinois University at Edwardsville raised its price by 59 percent, it landed directly in the crosshairs of the Obama administration.

Under a plan proposed by President Barack Obama in his state-of-the-union address in January, universities and colleges like SIUE that increase what they charge students at the fastest rates would forfeit their eligibility for some federal financial-aid money.

“Let me put colleges and universities on notice,” the president said. “If you can’t stop tuition from going up, the funding you get from taxpayers will go down.”

But a closer look at the details of the proposal as well as those universities whose costs appear to be rising most dramatically reveals that things aren’t always what they seem. And many institutions that appear as if they’d suffer under the proposal probably wouldn’t.

The Obama administration wants to judge universities by the increases not in their tuitions, but in their net prices, which means the actual cost of attendance—including transportation, room, board and books—minus financial aid.

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