By MARY PATRICK
President Barack Obama’s plan to lower education costs, which was unveiled this week during a speech in Buffalo, would fundamentally change how potential students pick a university to attend.
Obama’s plan, as described in the New York Times and other media outlets, would call for a federal government rating system for universities to be in place by 2015. The system would involve rating schools based on many different factors and making that information available to college students.
Among the factors that would be considered are tuition, graduation rates, debt and earnings of graduates, and the percentage of lower-income students who attend the school.
Universities would be compared against their peer group. The ultimate goal is to base federal student aid partly on the rankings, if the plan is approved by Congress. Obama hopes to have that part of the plan – federal aid being tied to the university’s rating – by 2018. Doing so will require a new law by Congress.
In unveiling the plan during a speech at the University of Buffalo, Obama said he knows his proposal will be controversial.
“These reforms won’t be popular with everybody, especially those who are making out just fine under the current system,” he said.
Controversy already surrounds the proposal. While some states, such as Ohio, Indiana and Tennessee, have proposed tying student aid to the outcomes of those who graduate, it is not an idea that has ever been tried at the federal level.
There is also the question of how to determine the earnings of graduates. Will they look 5, 10 or 20 years down the road? There are also questions about how the government would determine which schools are “peers” of others.
Currently, the $150 billion in federal aid to students is distributed to schools based on the number of students. The number of students who graduate or the amount of debt they rack up is not considered.
Another facet of Obama’s plan is expanding the Pay as You Earn plan, which allows lower income students to cap their student loan repayments at 10% of income. Part of Obama’s plan would be an informational campaign so that people who are eligible for the program will be made aware of it.
Not all the pressure would be on the colleges. Obama is also calling for an end to giving students their federal loans in a lump sum payment at the beginning of the year. Instead, he would want to spread the loans out throughout the year to ensure that students only get money if they stay in school.
Obama also wants to see colleges continue to pursue distance learning and offer three-year degrees and dual enrollment programs that allow high school students to start college courses, according to the New York Times.
Obama’s push for education reform is driven by the rising cost of education. The cost of in-state tuition for college students at public schools has increased 257% in 30 years, according to numbers from the College Board.
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