President Barack Obama on Thursday will unveil a broad plan to lower the cost of college, the highlight of which involves a new ratings system that ties the federal government’s allocation of financial aid to the ratings system.
Obama’s plan would instruct the Department of Education to rank colleges with their peers, according to new measures that evaluates their success and affordability.
Some of these measures, according to the White House, include the following:
- Access, such as percentage of students receiving Pell grants;
- Affordability, such as average tuition, scholarships, and loan debt; and
- Outcomes, such as graduation and transfer rates, graduate earnings, and advanced degrees of college graduates.
Obama will talk about this plan during two stops on a bus tour in Buffalo and Syracuse, N.Y., on Thursday.Obama wants the ratings system to be in place by the 2015 school year. If all goes well, the government would start allocating financial aid according to the system by 2018 — a time span that would give colleges opportunity to adjust for the new system. Students attending higher-performing colleges could receive larger Pell Grants and more affordable student loans, the White House said.
It’s clear that Obama wants major changes in the cost of higher education. In an email to supporters on Wednesday night, he emphasised that the U.S. needs to “fundamentally rethink” its approach to the cost of higher education.
“Just tinkering around the edges won’t be enough: To create a better bargain for the middle class, we have to fundamentally rethink about how higher education is paid for in this country. We’ve got to shake up the current system,” Obama said in the email.
The administration can produce its ranking system on its own, but the power to enforce it and change the way federal aid is allocated would require Congressional approval.
As has become customary with Obama’s recent economic-themed speeches, the backdrop looms of a showdown with Congressional Republicans over raising the debt ceiling and avoiding a government shutdown.
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