Obama vows college cost controls

President Obama vowed to “shake up” higher education and “tackle rising costs,” in a speech Wednesday at Knox College. “It is critical that we make sure that college is affordable for every single American who’s willing to work for it,” said Obama, stressing college affordability for middle-class families.

“Families and taxpayers can’t just keep paying more and more and more into an undisciplined system where costs just keep on going up and up and up. We’ll never have enough loan money, we’ll never have enough grant money, to keep up with costs that are going up 5, 6, 7 percent a year. We’ve got to get more out of what we pay for,” Obama said.

“Now, some colleges are testing new approaches to shorten the path to a degree, or blending teaching with online learning to help students master material and earn credits in less time.  In some states, they’re testing new ways to fund college based not just on how many students enroll, but how many of them graduate, how well did they do,” he said.

In the 2012 State of the Union address, Obama put colleges “on notice” that federal funding would be linked to controlling tuition increases, notes Inside Higher Ed. That hasn’t happened. At other times, Obama has blamed rising tuition on state budget cuts.

Amy Laitinen, deputy director for higher education at the New America Foundation, and a formerly a policy adviser in the Obama administration’s Education Department, agrees with the sentiments of the president’s talk Wednesday, but was unsure how much change higher education will see. “I think it’s encouraging rhetoric, but pulling it off will take serious political will and capital,” she said. “I’m wondering if his tone suggests he’s going to try to do this with executive authority.”

Laitinen said that there may seem to be a consensus on the issue of tuition rates, with college leaders and politicians alike worried about the impact of rising sticker prices. But she said this consensus only goes so far. “All of the solutions you are seeing don’t force institutions to change at all,” she said.

As an example, she noted that there is widespread interest in expanding options for income-based repayment of loans. In part, she said, “that’s because it does not fundamentally require a rethinking of the business model. It allows institutions to charge as much as they want.”

Becky Timmons, assistant vice president of government relations at the American Council on Education, suggested the president might offer federal grants to colleges that limit tuition increases. “I don’t see any tool or leverage available to him to set price controls.”

Early reaction on Capitol Hill was mixed, reports Ed Week.

Sen. Lamar Alexander, R-Tenn., cutting campus-based financial aid hurts students, not colleges. “Federal taxpayer funding for colleges and universities is almost all through grants and loans that go to about 20 million students, so his threat to reduce federal spending for colleges is really a threat to cut federal aid to students,” Alexander said.

As Obama was speaking, the Senate passed a bipartisan student loan bill that will lower interest rates now, but will let them rise with government borrowing costs. Undergraduate loans are capped at 8.25 percent, graduate loans at 9.5 percent and PLUS loans at 10.5 percent. The House is expected to pass the compromise bill, which has Obama’s support.

POSTED BY Joanne Jacobs ON July 26, 2013

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