Obama Decries Rising Cost of College Education

Obama decries rising cost of college educationANN ARBOR, Mich. (AP) - President Barack Obama called Friday for an overhaul of the higher education financial aid system, warning that colleges and universities that fail to control spiraling tuition costs could lose federal funds.

The election year proposal was also a political appeal to young people and working families, two important voting blocs for Obama. But the initiative faces long odds in Congress, which must approve nearly all aspects of the president's plan.

Speaking to students at the University of Michigan, Obama said he was "putting colleges on notice" that the era of unabated tuition hikes is over.

"You can't assume that you'll just jack up tuition every single year. If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down," Obama said on the final stop of a three-day post-State of the Union trip to promote components of his economic agenda.

Obama told the largely supportive student audience that the nation's economic future depended on making sure every American can afford a world-class education.

"In the coming decade, 60 percent of new jobs will require more than a high school diploma," he said. "Higher education is not a luxury. It's an economic imperative that every family in America should be able to afford."

The president first announced the outlines of the financial aid proposal during Tuesday's State of the Union address. His plan targets what is known as "campus based" aid given to colleges to distribute in areas such as Perkins loans or in work study programs. Of the $142 billion in federal grants and loans distributed in the last school year, about $3 billion went to these programs. His plan calls for increasing that type of aid to $10 billion annually.

He also wants to create a "Race to the Top" competition in higher education similar to the one his administration used on K-12 to encourage states to better use higher education dollars in exchange for $1 billion in prize dollars. A second competition called "First in the World" would encourage innovation to boost productivity on campuses.

Obama is also pushing for the creation of new tools to allow students to determine which colleges and universities have the best value.

Some in the higher education community are nervous that the Obama administration could be setting a new precedent in the federal government's role in controlling the rising costs of college. Following the speech, Molly Corbett Broad, president of the American Council on Education, issued a statement saying there's concern that the proposal would "move decision-making in higher education from college campuses to Washington, D.C."

Sen. Lamar Alexander, R-Tenn., a former education secretary, said the autonomy of U.S. higher education is what makes it the best in the world, and he's questioned whether Obama can enforce any plan that shifts federal aid away from colleges and universities without hurting students.

"It's hard to do without hurting students, and it's not appropriate to do," Alexander said. "The federal government has no business doing this."

But Obama education secretary, Arne Duncan, said Friday that institutions of higher learning should get federal dollars based in part on their performance.

"Historically, we've funded universities whether or not they've done a good job of graduating people, whether or not they've done a good job of keeping down tuition," Duncan said on MSNBC's "Morning Joe."

Rep. George Miller, D-Calif., the ranking member of the House Education and Workforce Committee, said there is bipartisan concern in Congress about the rising costs of college, and he's hopeful the president's plan will open up a dialogue about the problem. Some Republicans in the past, including Rep. Buck McKeon, R-Calif., have offered proposals similar to the president's.

The administration has already taken a series of steps to expand the availability of grants and loans and to make loans easier to pay back. During the State of the Union, Obama spelled out other proposals to make college more affordable, such as extending a tuition tax break and asking Congress to keep loan interest rates from doubling in July.

His administration has also targeted career college programs - primarily at for-profit institutions - with high loan default rates among graduates over multiple years by taking away their ability to participate in such programs.

But until now, the administration has done little to turn its attention to the rising cost of tuition at traditional colleges and universities.

The average in-state tuition and fees at four-year public colleges last fall rose 8.3 percent and, with room and board, now exceed $17,000 a year, according to the College Board. Rising tuition costs have been blamed on a variety of factors, including a decline in state dollars, an over-reliance on federal student loan dollars and competition for the best facilities and professors.


Hefling reported from Washington.

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This is definately the worst president in history, even surpassing Jimmy Carter for the title.

January 31 2012 at 2:20 PM Report abuse +1 rate up rate down Reply
1 reply to granaryst's comment

Jimmy loves him.

February 02 2012 at 1:54 PM Report abuse +1 rate up rate down Reply

By putting more people into poverty and on food stamps, how does obama and his thugs accomplish lower college costs? T H I N K

January 31 2012 at 2:18 PM Report abuse +1 rate up rate down Reply

When I went to U of Maryland I could put myself through with Summer work and a part time job while in school. I lived on the cheap and bought used books. Then came student loans. Now it's about impossable to go without loans to repay.

January 31 2012 at 1:43 PM Report abuse rate up rate down Reply

Yep free market ALWAYS wins. You’ve never seen a free market in your life time. You must LOOK to American history prior 1913 & implementation of socialists institutions like Soc Sec, Medicare, IRS, & the fed res dollar, a false, un backed, paper/electronic system, now failing to immutable free market forces, just as all fiats of history have. Do you really think this is the first time? Do you not know that our republic is NOT the first in history or the first to use fiat money to allow the govt to wildly spend treasure it doesn’t hold through ever increasing money supply (known commonly as inflation)?
The free market is reasserting dominance but at the default of the current man made, govt manipulated, system in which you have lived all your life. Same as the fall of the Soviet Union do to socialism, (steeling wealth and printing for redistribution) so shall we or more specifically the fed res & all the institutions it holds up. Gold and silver coin will be the only monetary system of exchange, as recently re adopted in Utah soon to be followed by Georgia and 12 other states. I, my friend will and have, ever since I returned to real money and exchanged my dollars, continue to prosper. The tool of govt spending & redistribution is already on the trash heap of history all that is left now are deniers that wish to continue their free loading on the govt tity. Your ideals have already lost, again. Got gold?

January 31 2012 at 1:35 PM Report abuse rate up rate down Reply

"You cant jack up tuition every year " Really? Isnt this what he is doing with national debt? He can? And talk is cheap, what he was doing about it for last three years? He just discoverd the problem?

January 31 2012 at 8:55 AM Report abuse +4 rate up rate down Reply

if this stupid muslim clown wants to close all colleges, go ahead ,,half of america is closed already n will stay closed untill this muslim clown is removed from our white hyouse in handcuffs. ! !

January 31 2012 at 8:24 AM Report abuse +4 rate up rate down Reply

My advice: Take grants, but avoid the student loans altogether. Instead, get a job, live at home and pay everything else as you go, so you owe nothing when you graduate. Federal Student Aid (Pell Grants) offered by the government will only meet about 10% of the actual college tuition and class costs. So, if you don't have the rest of what you will need (including housing costs) in the bank already, it must be borrowed by the student and parents. The guaranteed student/parent loan payments will be due beginning the summer following the first year of school and increase with each years loan every summer thereafter. Thus, by the time the student graduates from 4 years of college, payments of $800 -1200 per month will be due every month for the next ten years or more. Student loans are like concrete anchors around the students and parents neck. They must be secured with the parent's home and can not be discharged in bankruptcy. And, if the student can't find a job that pays enough to make the payments, the parents must, and if the parents can't afford the payments, the Department of Education will sieze the home, tax returns and bank accounts to get the money. In reality, the only folks that can afford college educations are the wealthy, or the low income families who have thier children's college entirely funded by -------us, the middle class taxpayers, who can't afford to send our own kids to college without borrowing money.

January 30 2012 at 9:29 PM Report abuse rate up rate down Reply

EDUACTION GOVT SUBSIDEES INCREASES DEMAND WITH OUT INCREASING SUPPLY. PRICE INCREASE WAS/IS AN IMMUTABLE RESULT. Will libtards ever comprehend any immutable ( unchangeable ) laws of economics?
Got gold?

January 30 2012 at 3:49 PM Report abuse +2 rate up rate down Reply
1 reply to Mike's comment

Libs are just toooooo dumb.

January 30 2012 at 9:22 PM Report abuse +5 rate up rate down Reply

The point here is very simple. We cannot have college costs rising at three and four times the rate of inflation and expect that it can remain affordable. Colleges need to rein in these runaway costs and run leaner operations.

January 30 2012 at 2:19 PM Report abuse rate up rate down Reply
1 reply to elendil3136's comment

Price will NOT go down until demand drops. Stop the subsidees and both will drop.

January 30 2012 at 3:49 PM Report abuse +3 rate up rate down Reply

This guy does not seem to understand we are broke and now he is pandering for the youth vote. W

January 30 2012 at 1:22 PM Report abuse +4 rate up rate down Reply