Obama demands colleges lower tuition, cut costs

President Obama last week announced his plan to make college more affordable by extending federal financial aid to students and encouraging schools to keep the cost of education low.

The Obama administration is urging schools to lower costs by tying the amount of aid available to students on-campus to the affordability of the school. The administration is also requiring colleges and universities to create a summary sheet of their financial aid packages, as well as post-graduate earning and employment statistics in an easy-to-consume form.

"So, let me put colleges and universities on notice: If you can't stop tuition from going up, the funding you get from taxpayers will go down," said Obama in his State of the Union address on Jan. 24.

If approved by Congress, the amount of federal money available for Perkins loans (federally subsidized, need-based loans administered by individual schools) would grow from the current $1 billion to $8 billion, bumping the number of schools that can offer Perkins loans from 1,700 to 4,000. In his State of the Union address, the President also hinted that he plans to double the number of work-study jobs over the next five years and offer an extension of interest rates on student loans.

Increasing the Perkins loans would not increase the federal budget, as Perkins loans are repaid with interest over a 10-year period.

"Other parts of the plan — like doubling the number of work-study jobs, and keeping the interest rate on subsidized Stafford loans at the current 3.4 percent — would be expensive," said New York Times reporter Tamar Lewin in her article titled "Obama Plan Links College Aid With Affordability."

While nearly everyone is in favor of keeping education affordable, some in the higher education community balked at the idea of tightening the federal leash on schools. Colleges and universities are being asked to increase enrollment and extend financial aid at a time when states are clamping down on education budgets. Some fear the result of the affordability fervor will be decreasing quality

of education.

Furthermore, because public universities are highly vulnerable to state budget cuts, some fear they will be unfairly jeopardized by the Obama administration's plan to reward with federal aid those schools that keep tuition from growing.

Keeping in mind that more than 70 percent of college students in the United States attend public universities, states will be asked to take the burden of that education back onto their shoulders.

These schools get their money from various sources, tuition included, but endowments and alumni donations also contribute to the budget. The largest source of income for public institutions, however, is state governments, and when a state experiences economic strife, spending on education goes down and tuition must go up.

"Judging a school's efficiency solely on the basis of the tuition it charges can thus be misleading, because it doesn't take into account the level of state funding an institution receives. Nor is it a particularly good indicator of effectiveness in improving student outcomes, because many students leave college for reasons unrelated to tuition costs," reported the Baltimore Sun.

Some have likened Obama's competition-for-aid scenario to No Child Left Behind, in that in order to incentivize excellence, the federal government will foster those programs that are performing well, despite the fact that these are the very programs least in need of care.

Daniel may be reached at dbentson@su-spectator.com