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Obama decries rising cost of college education

By Jim Kuhnhenn and Kimberly Hefling

Associated Press

LAST UPDATED: 07:03 a.m. HST, Jan 27, 2012

ANN ARBOR, Mich.>> President Barack Obama called Friday for an overhaul of the higher education financial aid system, warning that colleges and universities that fail to control spiraling tuition costs could lose federal funds.

The election year proposal was also a political appeal to young people and working families, two important voting blocs for Obama. But the initiative faces long odds in Congress, which must approve nearly all aspects of the president's plan.

Speaking to students at the University of Michigan, Obama said he was "putting colleges on notice" that the era of unabated tuition hikes is over.

"You can't assume that you'll just jack up tuition every single year. If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down," Obama said on the final stop of a three-day post-State of the Union trip to promote components of his economic agenda.

Obama told the largely supportive student audience that the nation's economic future depended on making sure every American can afford a world-class education.

"In the coming decade, 60 percent of new jobs will require more than a high school diploma," he said. "Higher education is not a luxury. It's an economic imperative that every family in America should be able to afford."

The president first announced the outlines of the financial aid proposal during Tuesday's State of the Union address. His plan targets what is known as "campus based" aid given to colleges to distribute in areas such as Perkins loans or in work study programs. Of the $142 billion in federal grants and loans distributed in the last school year, about $3 billion went to these programs. His plan calls for increasing that type of aid to $10 billion annually.

He also wants to create a "Race to the Top" competition in higher education similar to the one his administration used on K-12 to encourage states to better use higher education dollars in exchange for $1 billion in prize dollars. A second competition called "First in the World" would encourage innovation to boost productivity on campuses.

Obama is also pushing for the creation of new tools to allow students to determine which colleges and universities have the best value.

Education secretary, Arne Duncan, said Friday that institutions of higher learning should get federal dollars based in part on their performance.

"Historically, we've funded universities whether or not they've done a good job of graduating people, whether or not they've done a good job of keeping down tuition," Duncan said on MSNBC's "Morning Joe."

Some in the higher education community are nervous that the Obama administration could be setting a new precedent in the federal government's role in controlling the rising costs of college.

The administration has already taken a series of steps to expand the availability of grants and loans and to make loans easier to pay back. During the State of the Union, Obama spelled out other proposals to make college more affordable, such as extending a tuition tax break and asking Congress to keep loan interest rates from doubling in July.

His administration has also targeted career college programs — primarily at for-profit institutions — with high loan default rates among graduates over multiple years by taking away their ability to participate in such programs.

But until now, the administration has done little to turn its attention to the rising cost of tuition at traditional colleges and universities.

The average in-state tuition and fees at four-year public colleges last fall rose 8.3 percent and, with room and board, now exceed $17,000 a year, according to the College Board. Rising tuition costs have been blamed on a variety of factors, including a decline in state dollars, an over-reliance on federal student loan dollars and competition for the best facilities and professors.

Sen. Lamar Alexander, R-Tenn., a former education secretary, said the autonomy of U.S. higher education is what makes it the best in the world, and he's questioned whether Obama can enforce any plan that shifts federal aid away from colleges and universities without hurting students.

"It's hard to do without hurting students, and it's not appropriate to do," Alexander said. "The federal government has no business doing this."


Hefling reported from Washington.

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LanaUlulani wrote:

There goes Obama the Hawaiian Be talking out of his elemu again.

HE is part of the problem of rising tuition costs.

When HE pushed for Quantitative Easing 2 and 3 it drove tuition prices UP along with gas prices and food prices. Incomes are not rising but gas prices, food prices, and TUITION are. Obama the Hawaiian Be is partly to blame. Once again he acts arrogantly as though it's someone else's fault. NO... it's HIS policies that helped to create tuition prices going sky high.

on January 27,2012 | 05:14AM
false wrote:
He donʻt really care. His children are set for life.
on January 27,2012 | 05:51AM
mustangguru wrote:
Their costs rise due to inflation, doesn't he know that??
on January 27,2012 | 06:54AM
HD36 wrote:
Universities know that students get thousands in federal gauranteed student loans, so all the money bids up the prices of tuition. A similar thing happened in the housing market when the government gauranteed risky loans, all the excess liquidity caused the price of houses to spike. Dry up the source of excess liquidity and tuition will go down. Anything the government tries to meddle in, ie ,. medicine, housing, education, causes prices to rise abnormally.
on January 27,2012 | 07:05AM
Pacej001 wrote:
Bingo! We have a government-induced higher education bubble. And when it bursts? Must stimulate, must subsidize.
on January 27,2012 | 07:10AM
mrluke wrote:
There goes Barry again, finding a scapegoat to blame for his own failings. Tuition is tied to operational costs. Econ. 101 tells you that.
on January 27,2012 | 07:07AM
false wrote:
He went to Harvard they skip Econ 101 and go straight Fund Raising 401
on January 27,2012 | 07:21AM
cojef wrote:
Yep, our "Entitlement President" is at again in full campaign mode, asking the college age generation to vote for him again. He doesn't give hoot about rising cost, because by taxing the rich, he can give to needy students. Only this time the students will have to borrow more student aid moneys, cuz college costs are not coming down The college age group is ripe for picking, as they are the most gullible and vulnerable. Wonder if the President can hoodwink them again.
on January 27,2012 | 07:41AM
cabot17 wrote:
State governments need to balance their budgets. College tuition is rising rapidly because states have made drastic cuts in their funding for higher education. Colleges make up for the loss of state funding by raising tuition. If the federal government cuts its funding for higher education, then college tuition will rise even faster. As government subsidies for state colleges and universities get cut, schools have to rely more and more on students and parents to make up the difference. State colleges are increasingly becoming privatized in the United States. If this trend continues, state college students and their families will soon be paying sky-high tuition equal to private colleges. This means that only those families who can afford private school tuition will be able to send their kids to college.
on January 27,2012 | 07:26AM
808Cindy wrote:
LanaUlulani / false / mrluke / cojef / ??????????
on January 27,2012 | 07:49AM
serious wrote:
Obama should offer the same funding he got---but I can't find the answer to that anywhere???
on January 27,2012 | 09:41AM
entrkn wrote:
College on-line is our future...
on January 27,2012 | 11:23AM
Carang_da_buggahz wrote:
Ahhh, yes. King Obama's latest edict. As you wish, Sire. Just speak, snap your fingers, and it shall be done. (Trumpets start sounding here)....All Hail King Barack Hussein! (Now prostrate yourselves and repeat, "We're not worthy! We're not worthy!). And so continued the reign of the King of "Hope" and "Change"...
on January 27,2012 | 12:27PM
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