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Obama: Students Need Colleges They Can Afford
President Obama has called for curbing the growth of college costs for middle-class and low-income students. While most families struggle to keep up, low-income families, not surprisingly, are the hardest hit. Since Obama broached this issue in his recent State of the Union address, some details have emerged about his plans to make college more affordable. These include linking eligibility for the billions of federal dollars spent on campus-based aid to the schools’ ability to provide better value to students.
College costs are spiraling out of control. Currently, to send just one child to a four-year university for one academic year, low-income families must contribute an amount equivalent to 72 percent of their annual household income. In contrast, families with annual earnings of $100,000 are required to contribute only 21 percent.
Why is this happening? First, the buying power of Pell grants, the federal government’s primary program to help low-income students afford college, has plummeted over the past three decades. Second, states have been slashing aid to institutions. And finally, institutions are steadily shifting their aid resources away from students who couldn’t go to school without financial help, to those who don’t really need it. Low-income and moderate-income students feel the pinch at each level — federal, state, and institutional.
Obama’s plan would address several facets of affordability. It calls for an increase in campus-based funding to $10 billion annually. The proposal also includes a $1 billion competitive grant program — a higher education version of the K-12-focused Race to the Top — to incentivize states to contain skyrocketing tuition and fees. In a separate proposal, the president outlined a $55 million First in the World competition, designed to reward institutions that successfully rein in costs.
To help students and families make informed decisions about college, the president also proposed a “college scorecard.” Each scorecard would provide important school data such as graduation rates, net price, postgraduate earning potential, and job-placement rates. More details are needed to determine the merits of this proposal, especially with respect to how well it advances equity. But if done well, such a tool could help families make informed decisions about how to get the most educational value for their money.
An educated populace is integral to our national goals of reclaiming our position as the most college-educated nation by 2020 and producing world-class workers ready to lead the global economy. We won’t reach these goals if our students can’t afford a high-quality college education. Federal, state, and institutional commitment to making college more affordable is a necessary step in the right direction.