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-updatedBelow is (most of) the fact sheet:
For ImmediateReleaseJanuary 27, 2012
FACT SHEET: PresidentObama’s Blueprint for Keeping College Affordable and Within Reach for AllAmericans
“Ofcourse, it’s not enough for us to increase student aid… States also need to dotheir part, by making higher education a higher priority in theirbudgets. And colleges and universities have to do their part byworking to keep costs down.”
President Barack Obama
State of the Union, January 24, 2012
Inhis State of the Union address, President Obama laid out a blueprint for aneconomy 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 Presidentcalled for a comprehensive approach to tackling rising college costs. Intoday’s global economy, a college education is no longer just a privilege forsome, but rather a prerequisite for all. To reach a national goal ofleading the world with the highest share of college graduates by 2020, we mustmake college more affordable.
PresidentObama has emphasized the responsibility shared by the federal government,states, colleges, and universities to promote access and affordability inhigher education, by reining in college costs, providing value for Americanfamilies, and preparing students with a solid education to succeed in theircareers. Over the past three years, the Obama Administration has taken historic steps to help studentsafford college, including reforming our student aid system to become moreefficient and reliable and by expanding grant aid and college taxcredits.
This year, President Obama is calling on Congress to advance new reforms that will promote shared responsibility toaddress the college affordability challenge. If these proposals are passed,this will be the first time in history that the federal government has tiedfederal campus aid to responsible campus tuition policies.
President Obama will begin the third day of his post-State of the Uniontravels with an event at the University of Michigan campus in Ann Arbor,focusing on the importance of tackling rising college costs to ensure America’sstudentsand workers can obtain the education and training they need so that we have aworkforce prepared for the jobs of the 21st century.
Shared Responsibility toTackle Rising College Costs
Rewarding Schools thatKeep College Affordable
· ThePresident’s proposal to reform student aid to keep tuition from spiraling toohigh and drive greater value will improve distribution of federal financial aid and increasecampus-based aid. This reform will reward colleges that are succeeding inmeeting the following principles:
1) Settingresponsible tuition policy, offering relatively lower net tuition prices and/or restrainingtuition growth.
2) Providinggood value to students and families, offering quality education and training that preparesgraduates to obtain employment and repay their loans.
3) Servinglow-income students, enrolling and graduating relatively higher numbers ofPell-eligible students.
The campus-based aid that the federal government provides to collegesthrough Supplemental Educational Opportunity Grants (SEOG), Perkins Loans, andWork Study isdistributed under an antiquated formula that rewards colleges for longevity inthe program and provides no incentive to keep tuition costs low. The President is proposing to change how those funds are distributed byimplementing an improved formula that shifts aid from schools with risingtuition to those acting responsibly, focused on setting responsible tuitionpolicy, providing good value in education, and ensuring that higher numbers oflow-income students complete their education. He is also proposing to increasethe amount of campus-based aid to $10 billion annually. The increase isprimarily 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-termvalue will be rewarded with additional dollars to help students attend. Thosethat show poor value, or who don't act responsibly in setting tuition,will receive less federal campus-based aid. Students will receivethe greatest government grant and loan support at colleges where they arelikely to be best served, and little or no campus aid will flow to collegesthat fail to meet affordability and value standards.
Creating New Incentivesto Promote Affordability and Quality
· The Raceto the Top: College Affordability and Completion will promote change instate systems of higher education. The President is proposing a program thatwould spur systemic state reforms to reduce costs for students and promotesuccess in our higher education system at public colleges. This $1 billioninvestment would incentivize states to:
o Revamp the structure of state financing forhigher education.
o Align entry and exit standards with K-12education and colleges to facilitate on-time completion.
o Maintain adequate levels of funding forhigher education in order to address important long-term causes of cost growthat the public institutions that serve two-thirds of four-year college students.
The Race to the Top forCollege Affordability and Completion would incentivize governors and statelegislatures around the nation to act on spurring this innovative reform.Through cost-saving measures like redesigning courses and making better use ofeducation technology, institutions can keep costs down to provide greateraffordability for students.
· TheFirst in the World competition will improve long-term productivity in higher education by investing$55 million to enable individual colleges (including Minority-ServingInstitutions) and nonprofit organizations to develop, validate, or scale upinnovative and effective strategies for boosting productivity and enhancingquality on campuses. This initiative would provide modest start-up funding forindividual colleges, including private colleges, for projects that could leadto longer-term and larger productivity improvements among colleges anduniversities – 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 atspurring changes in the culture of higher education.
EmpoweringFamilies and Students to be Informed Consumers· New actionsto provide consumers with clearer information about college costs and qualitywill improve the decision-making process in higher education for Americanstudents and allow families to hold schools accountable for their tuition andoutcomes. President Obama is proposing new tools to provide students andfamilies with information on higher education, presented in a comparable andeasy-to-understand format:
o The Administration will create a CollegeScorecard for all degree-granting institutions making it easier forstudents and families to choose a college that is best suited to their needs,priced affordably, and consistent with their career and educationalgoals.
o We will also make an updated version of the‘Financial Aid Shopping Sheet,’ announced in October, a requiredtemplate for all colleges, rather than a voluntary tool, to make it easier forfamilies to compare college financial aid packages.
o The President is also proposing to begin collectingearnings and employment information for colleges, so that studentscan have an even better sense of the post post-graduation outcomes they canexpect.
RedoublingFederal Support to Tackle College Costs · Ashighlighted by the President in his State of the Union address, we are callingon Congress to:
o Keep student loaninterest rates low: This summer, the interest rates on subsidized Stafford studentloans are set to double from 3.4% to 6.8% – a significant burden at a time whenthe economy is still fragile and students are taking on increasing amounts ofdebt to earn a degree. The President is asking Congress to prevent that hikefrom taking place for a year to keep student debt down, a proposal that willkeep interest rates low for 7.4 million student loan borrowers and save theaverage student over a thousand dollars.
o Double the number ofwork-study jobs available: The President also proposes to double the number ofcareer-related work-study opportunities so that students are able to gainvaluable work-related experience while in school.
o Maintain our commitmentto college affordability: Over 9 million students and families per year take advantage ofthe 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 preventit from expiring in 2012.
Building on Progress
President Obama has worked throughout hisAdministration to expand access to college and provide greater resources andsupport so that more students graduate with the skills and knowledge they needto succeed in the workforce:
· Helpingstudents and families pay for college: The Obama Administration has raised the maximum Pell Grant awardto $5,635 next year – a $905 increase since 2008.
Making collegeloans more affordable: The Obama Administration’s “Pay as You Earn” plan will enable 1.6million students to take advantage of a new option to cap student loanrepayments at 10% of monthly income as soon as this year. Borrowerslooking to determine whether or not income-based repayment is the right optionfor 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-tuitionUPDATE: 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.
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