College Guide


January 27, 2012 6:29 PM Obama’s Plan for College Costs

By Daniel Luzer

This morning, following up on his message about higher education from his State of the Union address earlier this week, Barack Obama spoke on college affordability at the University of Michigan.

Obama, who’s been talking about the need to improve college affordability for several months, today unveiled his plan. According to an article by David Jesse and Kathleen Gray in the Detroit Free Press:

If the nation’s universities want to see federal dollars continue to flow to them, they need to a better job of holding down tuition, President Barack Obama told a crowd of more than 3,000 at the University of Michigan this morning.
His plan boils down to this: students who attend colleges and universities that slow down what Obama called skyrocketing tuition costs will get more federal student aid. If students attend schools that don’t keep costs down, they won’t get as much aid.

Under the president’s proposed plan institutions’ eligibility for federal student aid—Perkins loans, work-study money, and Pell grants—would be tied to their success in keeping costs down. Essentially, fewer, or lower, tuition hikes means more federal money. Institutions that continue, like the University of Michigan in recent years, to raise tuition at 8 percent a year will earn less federal money.

Here’s the president’s speech.

This is potentially a promising approach and represents the first time the federal government has made a serious effort to address skyrocketing tuition. The success of this, however, depends on how institutions address the challenge. Part of the reason public universities have been raising tuition so enthusiastically is that state legislatures have been providing them with less operation money. One way to address the president’s policy is to cut administrative staff and try and persuade legislatures to increase their generosity.

The other option, however, is to just accept the reduced federal money and enroll richer students.

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer


  • dave mazella on January 28, 2012 9:47 AM:

    Um, no, I wouldn't call this a promising approach, because of the problem you pointed out yourself: the role of the states' defunding of public higher education. This plan does not confront those declining contributions, except by penalizing institutions for responding to the decline, and making it harder for their students to receive support. So what happens if the states continue the trend of defunding their own schools?

    All the language of "cost-cutting" and "efficiency" is just a way to justify larger class sizes, fewer full-time instructors, fewer face to face courses, and reduced instructional quality; hard to say how this benefits the students who really need those skills and degrees to make it into the middle class.

    However, anything we can do to support students more fully is a good thing. But I don't think this comes anywhere close to addressing the needs of the people who really are desperate for more affordable higher education.

  • Crissa on January 30, 2012 10:02 AM:

    I'm not sure what else the feds can do. They can't just keep increasing grants as stats decrease funding.

    I would've stated it differently, though, since this will be hugely unfair to any university that pays market rate for its employees. And as an industry, they're not known for paying the baseline employees well at all.