WASHINGTON — President Barack Obama proposed Thursday initiatives aimed at holding down the cost of college, starting with a rating system that would dictate the flow of federal funds to the schools.
Government money would be allocated between colleges on the basis of how they fared in areas such as access, affordability and outcomes, rather than simply the number of students enrolled.
Obama, speaking at the University of Buffalo in New York, talked about ways to encourage innovative approaches to education that are more cost-effective. He also highlighted the need to help make student loan debt more manageable.
“If we move forward on these three fronts — increasing value, encouraging innovation, helping people responsibly manage their debt — I guarantee you we will help more students afford college,” Obama said in his speech. “We'll help more students graduate from college. We'll help more students get rid of that debt so they can get a good start in their careers.”
Some aspects of the plan can be accomplished without help from Congress. For example, the administration will move forward on developing the rating system with the goal of having it in place for the 2015-16 school year.
Under the proposal, those ratings would then be tied into the disbursement of federal dollars by 2018, but that step would require congressional action.
On helping borrowers manage their existing debt, the administration plans to do more to publicize an existing pay-as-you-earn program that caps some borrowers payments at a percentage of their income.
But part of Obama's plan calls for expanding the number of people eligible for that program, a move that would have to go through Congress.
Sen. Tom Harkin, D-Iowa, will be a key player in pushing legislation on these proposals as chairman of the Senate Committee on Health, Education, Labor and Pensions. That committee already has been preparing for the coming reauthorization of the Higher Education Act.
Harkin applauded Obama's proposal to develop a new rating system as a way to foster more transparency and encourage colleges to do a better job.
“Higher education is a critical step for young people today,” Harkin said in a statement. “While we have made significant progress in recent years to boost college access and affordability, much more needs to be done.”
Obama noted in his speech that the average tuition at a public four-year college has risen more than 250 percent, while typical family income has risen 16 percent.
While many don't pay full sticker price, he said, that gap between family incomes and tuition is leading students to take on more and more debt, with the average student borrower now graduating $26,000 in debt.
According to state-by-state statistics released by the White House on Thursday about 841,400 student borrowers in Iowa owe just under $20 billion, while about 253,400 student borrowers in Nebraska owe a little over $5.8 billion.
“I've heard from a lot of these young people who are frustrated that they've done everything they're supposed to do — got good grades in high school, applied to college, did well in school,” Obama said, “but now they come out, they've got this crushing debt that's crippling their sense of self-reliance and their dreams.”