As a prior blog post noted, President Obama's State of the Nation address earlier this week contained a threat to cut federal support to universities whose tuitions were rising. But it was not clear what exactly was involved.
Insider Higher Ed has a brief story - with a link to a NY Times iece and a link to a White House fact sheet about the proposal. In fact, to the extent that the proposal is implemented - always a question given Congressional gridlock - UC and UCLA are likely to benefit. Our tuition is rising but it is still low compared to the privates and many publics. And we have a good record at this campus with low income student enrollment and support. The issue is whether UC would be rewarded for relatively low tuition or penalized for percentage increases in tuition starting from a low base. The tuition under consideration is not the sticker price - which is what gets aired at Regents meetings - but the net price after student aid from the university.
The
Insider Higher Ed story is at
http://www.insidehighered.com/quicktakes/2012/01/27/full-details-obamas-college-affordability-proposals-updated
Below is (most of) the fact sheet:
For Immediate
Release
January 27, 2012
FACT SHEET: President
Obama’s Blueprint for Keeping College Affordable and Within Reach for All
Americans
“Of
course, it’s not enough for us to increase student aid… States also need to do
their part, by making higher education a higher priority in their
budgets. And colleges and universities have to do their part by
working to keep costs down.”
President Barack Obama
State of the Union, January 24, 2012
In
his State of the Union address, President Obama laid out a blueprint for an
economy that’s built to last – an economy built on American manufacturing,
American energy, skills for American workers, and a renewal of American values.
As an important part of keeping the American promise alive, the President
called for a comprehensive approach to tackling rising college costs. In
today’s global economy, a college education is no longer just a privilege for
some, but rather a prerequisite for all. To reach a national goal of
leading the world with the highest share of college graduates by 2020, we must
make college more affordable.
President
Obama has emphasized the responsibility shared by the federal government,
states, colleges, and universities to promote access and affordability in
higher education, by reining in college costs, providing value for American
families, and preparing students with a solid education to succeed in their
careers. Over the past three years, the Obama Administration has taken historic steps to help students
afford college, including reforming our student aid system to become more
efficient and reliable and by expanding grant aid and college tax
credits.
This year, President Obama is calling on Congress to advance new reforms that will promote shared responsibility to
address the college affordability challenge. If these proposals are passed,
this will be the first time in history that the federal government has tied
federal campus aid to responsible campus tuition policies.
President Obama will begin the third day of his post-State of the Union
travels with an event at the University of Michigan campus in Ann Arbor,
focusing on the importance of tackling rising college costs to ensure America’s
students
and workers can obtain the education and training they need so that we have a
workforce prepared for the jobs of the 21st century.
Shared Responsibility to
Tackle Rising College Costs
Rewarding Schools that
Keep College Affordable
·
The
President’s proposal to reform student aid to keep tuition from spiraling too
high and drive greater value will improve distribution of federal financial aid and increase
campus-based aid. This reform will reward colleges that are succeeding in
meeting the following principles:
1)
Setting
responsible tuition policy, offering relatively lower net tuition prices and/or restraining
tuition growth.
2)
Providing
good value to students and families, offering quality education and training that prepares
graduates to obtain employment and repay their loans.
3)
Serving
low-income students, enrolling and graduating relatively higher numbers of
Pell-eligible students.
The campus-based aid that the federal government provides to colleges
through Supplemental Educational Opportunity Grants (SEOG), Perkins Loans, and
Work Study is
distributed under an antiquated formula that rewards colleges for longevity in
the program and provides no incentive to keep tuition costs low. The President is proposing to change how those funds are distributed by
implementing an improved formula that shifts aid from schools with rising
tuition to those acting responsibly, focused on setting responsible tuition
policy, providing good value in education, and ensuring that higher numbers of
low-income students complete their education. He is also proposing to increase
the amount of campus-based aid to $10 billion annually. The increase is
primarily driven by an expansion of loans in the federal Perkins program –
which comes at no additional taxpayer cost.
Colleges that can show that they are providing students with good long-term
value will be rewarded with additional dollars to help students attend. Those
that show poor value, or who don't act responsibly in setting tuition,
will receive less federal campus-based aid. Students will receive
the greatest government grant and loan support at colleges where they are
likely to be best served, and little or no campus aid will flow to colleges
that fail to meet affordability and value standards.
Creating New Incentives
to Promote Affordability and Quality
·
The Race
to the Top: College Affordability and Completion will promote change in
state systems of higher education. The President is proposing a program that
would spur systemic state reforms to reduce costs for students and promote
success in our higher education system at public colleges. This $1 billion
investment would incentivize states to:
o Revamp the structure of state financing for
higher education.
o Align entry and exit standards with K-12
education and colleges to facilitate on-time completion.
o Maintain adequate levels of funding for
higher education in order to address important long-term causes of cost growth
at the public institutions that serve two-thirds of four-year college students.
The Race to the Top for
College Affordability and Completion would incentivize governors and state
legislatures around the nation to act on spurring this innovative reform.
Through cost-saving measures like redesigning courses and making better use of
education technology, institutions can keep costs down to provide greater
affordability for students.
·
The
First in the World competition will improve long-term productivity in higher education by investing
$55 million to enable individual colleges (including Minority-Serving
Institutions) and nonprofit organizations to develop, validate, or scale up
innovative and effective strategies for boosting productivity and enhancing
quality on campuses. This initiative would provide modest start-up funding for
individual colleges, including private colleges, for projects that could lead
to longer-term and larger productivity improvements among colleges and
universities – such as course redesign through the improved use of technology,
early college preparation activities to lessen the need for remediation,
competency-based approaches to gaining college credit, and other ideas aimed at
spurring changes in the culture of higher education.
Empowering
Families and Students to be Informed Consumers
·
New actions
to provide consumers with clearer information about college costs and quality
will improve the decision-making process in higher education for American
students and allow families to hold schools accountable for their tuition and
outcomes. President Obama is proposing new tools to provide students and
families with information on higher education, presented in a comparable and
easy-to-understand format:
o The Administration will create a College
Scorecard for all degree-granting institutions making it easier for
students and families to choose a college that is best suited to their needs,
priced affordably, and consistent with their career and educational
goals.
o We will also make an updated version of the
‘Financial Aid Shopping Sheet,’ announced in October, a required
template for all colleges, rather than a voluntary tool, to make it easier for
families to compare college financial aid packages.
o The President is also proposing to begin collecting
earnings and employment information for colleges, so that students
can have an even better sense of the post post-graduation outcomes they can
expect.
Redoubling
Federal Support to Tackle College Costs
·
As
highlighted by the President in his State of the Union address, we are calling
on Congress to:
o Keep student loan
interest rates low: This summer, the interest rates on subsidized Stafford student
loans are set to double from 3.4% to 6.8% – a significant burden at a time when
the economy is still fragile and students are taking on increasing amounts of
debt to earn a degree. The President is asking Congress to prevent that hike
from taking place for a year to keep student debt down, a proposal that will
keep interest rates low for 7.4 million student loan borrowers and save the
average student over a thousand dollars.
o Double the number of
work-study jobs available: The President also proposes to double the number of
career-related work-study opportunities so that students are able to gain
valuable work-related experience while in school.
o Maintain our commitment
to college affordability: Over 9 million students and families per year take advantage of
the Obama Administration’s American Opportunity Tax Credit – supporting up to
$10,000 over four years of college. In his State of the Union address,
the President called on Congress to make this tax credit permanent and prevent
it from expiring in 2012.
Building on Progress
President Obama has worked throughout his
Administration to expand access to college and provide greater resources and
support so that more students graduate with the skills and knowledge they need
to succeed in the workforce:
·
Helping
students and families pay for college: The Obama Administration has raised the maximum Pell Grant award
to $5,635 next year – a $905 increase since 2008.
Making college
loans more affordable: The Obama Administration’s “Pay as You Earn” plan will enable 1.6
million students to take advantage of a new option to cap student loan
repayments at 10% of monthly income as soon as this year. Borrowers
looking to determine whether or not income-based repayment is the right option
for them should visit http://studentaid.ed.gov/ibr.
UPDATE: NPR has a report at
http://www.npr.org/blogs/thetwo-way/2012/01/27/145985134/college-presidents-have-problems-with-obamas-message-on-tuition
UPDATE: President Yudof's response:
The University of California appreciates President Obama's focus on higher education and his efforts to assure that college is within reach for all Americans. We are pleased that the president is looking at ways to reward institutions that are doing a good job graduating more low-income students.
The University of California already has tuition that is highly redistributive: One third of every tuition dollar goes to financial aid, and more than half of our students pay no tuition. We have a strong record of providing high-quality education to students from families from a broad range of income levels, and we look forward to working with the Obama administration and Congress on these proposals as they move forward.
UC is proud of the robust state and institutional financial aid our enrolled students receive, and the university is continuously working to ensure that college costs remain low and affordable. Over the years, UC has cut costs and become significantly more efficient, while serving a historically high number of students. UC will continue to take actions to reduce costs and maintain its high quality and will work with the state of California to ensure a strong commitment to funding public higher education.
