Obama would tie grants, loans to affordability rank
BUFFALO, N.Y. – Targeting the soaring cost of higher education, President Barack Obama on Thursday unveiled a broad new government rating system for colleges that would judge schools on their affordability and perhaps be used to allocate federal financial aid.
But the proposed overhaul faced immediate skepticism from college leaders who worry the rankings could cost their institutions millions of dollars, as well as from congressional Republicans wary of deepening the government’s role in higher education.
The president, speaking to a student-heavy crowd of 7,000 at the University at Buffalo, said he expected pushback from those who have profited from the ballooning cost of college. But he argued that with the nation’s economy still shaky and students facing increasing global competition, making college affordable is “an economic imperative.”
“Higher education cannot be a luxury,” Obama said during the first stop on a two-day bus tour through New York and Pennsylvania. “Every American family should be able to get it.”
Republicans on Capitol Hill weighed in quickly with criticism. Lamar Alexander of Tennessee, the top Republican on the Senate Health, Education, Labor and Pensions Committee, cast the proposal as government overreach and suggested a state-by-state approach would be preferable.
“Washington needs to be careful about taking a good idea for one state and forcing all 6,000 institutions of higher education to do the exact same thing, turning Washington into a sort of national school board for our colleges and universities,” Alexander said.
For colleges and universities, millions of federal aid dollars could be on the line if schools are downgraded under the government rating system. If colleges line up against the idea of tying ratings to federal aid, the proposal would face nearly impossible odds. Almost all members of Congress have colleges or universities in their districts, and a coordinated effort to rally students and educators against the plan would probably kill it quickly.
“This is extraordinarily complicated stuff, and it’s not clear we have the complete data or accurate data,” said Molly Corbett Broad, the president of the American Council on Education that represents colleges and universities in Washington.
The rising cost of college has increasingly become a burden for many Americans. According to administration figures, the tuition costs at public, four-year universities has tripled over the last 30 years and average student loan debt stands at $26,000.
Over the past five years, the tuition sticker price at public four-year colleges is up 27 percent beyond overall inflation, according to a College Board survey. At private schools, the average student’s cost has risen 13 percent beyond overall inflation.
There has been little consensus among policymakers on how to curb college costs. While Obama’s proposal could give colleges an incentive to slow increases, it could also add massive reporting requirements that could be a burden on schools.
The new rating system does not require congressional approval, and the White House is aiming to have it set up before the 2015 school year. But Obama does need support from Congress in order to use the ratings as a basis for parceling out federal financial aid.
In addition to tuition, schools will also be rated on average student loan debt, graduation rates and the average earnings of graduates. Under Obama’s proposal, students attending highly rated schools could receive larger grants and more affordable loans.
The president is also seeking legislation to give colleges a “bonus” based on the number of students they graduate who received Pell Grants. The goal is to encourage colleges to enroll and graduate low- and moderate-income students.
Obama’s other proposals include a requirement that colleges with high dropout rates distribute student aid over the course of the semester rather than in a lump sum. The aim is to ensure that students who drop out do not receive funds for time they are not in school.
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