IT DIDN’T TAKE PRESIDENT Obama long to follow through on his campaign promise to make higher education more affordable for students and families. Within his first 50 days in office his administration worked closely with Congress to increase the maximum Pell Grant by $500 as part of the $787 billion economic stimulus package. The American Recovery and Reinvestment Act also included a partially refundable $2,500 tax credit for higher education expenses and $200 million to expand the Federal Work-Study program.
While other countries are
getting better at providing
higher education, the U.S.
has remained stagnant.
The financial aid community has praised the efforts of the Obama administration and Congress to provide this significant boost for financial aid. “We are truly grateful to President Obama and his administration for fighting to get this bill passed with meaningful increases in financial aid for needy students,” says Philip Day, president and CEO of the National Association of Student Financial Aid Administrators.
The student aid funding in the stimulus bill was a welcome surprise, but President Obama was just getting started.
A NEW FUNDING PRIORITY
In his speech to Congress on February 24, Obama made it clear that increasing college access and success would continue to be a top priority, pledging that by 2020, “America will once again have the highest proportion of college graduates in the world.”
Accomplishing this would be no small feat. There’s a widening gap between other countries’ college graduation rates and the rate that the United States graduates college students. The U.S. college completion rate is 15th among 29 developed countries, according to “Measuring Up 2008,” a study by the National Center for Public Policy and Higher Education (http://measuringup2008.highereducation.org). The United States, along with the Netherlands and Korea, currently awards 18 certificates and degrees for every 100 students enrolled. Switzerland, Japan, and Australia lead the world, awarding 26 certificates and degrees for every 100 students.
The report suggests that other countries are getting better at providing higher education while the United States has remained stagnant. We have the second highest percentage (39 percent) of 35- to 64-year-olds with at least an associate degree. Canada leads the world with 44 percent. The percentage of 25- to 34-year-olds in the United States with at least an associate degree is also 39 percent, but we are behind nine other countries in this category. Canada also leads this category with 55 percent.
The numbers suggest that the nation will not be able to achieve Obama’s goal by maintaining current practices.
“The time for tweaking the student aid system has come and gone,” Day said. “We now need a drastic overhaul of the system to help today’s student overcome financial barriers that keep them from successfully completing a higher education program after high school.”
Recognizing this fact, the Obama administration issued a budget blueprint for the 2010 fiscal year that proposes some dramatic changes for the nation’s student financial aid programs, including:
• Making the Pell Grant program a mandatory spending program so it is not subject to the annual budget process and automatically increasing the maximum award every year by the Consumer Price Index plus 1 percent.
• Eliminating the Federal Family Education Loan Program (FFELP) and originating all student loans through the federally run Direct Loan program.
• Dramatically increasing funding for Federal Perkins Loans.
• Creating a $2.5 billion Access and Completion Incentive Fund to support innovative federal-state partnerships to help low-income students complete their college education.
“President Obama’s new budget proposal outlines the most dramatic changes to federal student aid since the passage of the Higher Education Act in 1965,” says American Council on Education President Molly Corbett Broad. Referring to the proposed changes to Pell Grants and the student loan program, Broad continued, “In any other budget year, proposing even one of these changes would be considered dramatic. Proposing both of these together is truly extraordinary.”
