Saying “We've got a crisis in terms of college affordability,” President Obama outlined a three part proposal to reign in the cost of higher education before a capacity crowd at the University at Buffalo Thursday. The appearance was the first of the president’s two-day bus tour through New York and Pennsylvania designed to call attention to high education costs.
“We can’t go about business as usual,” Obama said. "Our economy can't afford the trillion dollars in outstanding student loan debt.”
The centerpiece of the proposal rests on tying financial aid to college performance, based on a new college rating system, before the 2015 school year. Higher-rated schools would qualify for larger federal grants, making them more affordable. "We want to rate colleges on who's providing the best value, so students and taxpayers get a bigger bang for their their buck,” Obama said.
Drawing a distinction between his rating system and popular consumer rankings, such as U.S. News & World Report, the president said those rankings are prone to gaming by schools eager to get better results.
Exactly how the ratings would work is still unknown, but the White House has already taken steps toward gathering relevant data with an online college scorecard launched earlier this year. The new ratings system would be a joint venture between the administrations and the nation’s colleges and universities.
Obama’s proposal also calls on colleges to disburse student aid gradually over the length of a semester, rather than through one payment. “We're going to make sure students who receive federal financial aid complete their courses before receiving grants for the next semester,” Obama said. “It's time to stop subsidizing schools that aren't producing good results.” Schools could also be eligible for bonus money based on the number of Pell Grant students who graduate, he said.
Addressing the need to help students manage current debt, Obama also proposed an expansion of a "Pay As You Earn" program that would cap loan repayments at 10 percent of income.
Obama acknowledged that parts of his proposal would need congressional support, while he could enact others on his own, but “we can’t afford the usual circus of distraction in Washington,” he said. “What we need is to build on the cornerstone of what it means to be middle class in America.”
The plan, not surprisingly, has already drawn criticism from the president’s opponents. Republican National Committee spokeswoman Kirsten Kukowski dismissed the proposal in advance, telling USA Today, "Obama's record with youth is wrought with failures from college costs to student loan debt, and his economy has made it difficult for young Americans to prosper.”
Some higher education officials also expressed reservations about the rating system. Speaking to The New York Times, Terry Hartle, senior vice president of the American Council on Education, said, “There are all kinds of issues, like deciding how far down the road you are looking, and which institutions are comparable. Ultimately, the concern is that the Department of Education will develop a formula and impose it without adequate consultation, and that’s what drives campus administrators nuts.”
Peter McPherson, president of the Association of Public and Land-grant Universities, said, “While much of the president’s plan is in line with public universities’ vision for greater transparency and accountability, we do have some concerns about a system of ratings instituted by the federal government based on incomplete and potentially misleading metrics. For example, it is reasonable to measure post-graduation outcomes, particularly employment. However, this must be done very thoughtfully, factoring in various employment-related scenarios across appropriate timelines."
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