Rabu, 28 Agustus 2013

Cutting college costs: five questions about Obama’s proposal

President Obama unveiled a plan Aug. 22 to make college more affordable. "We can't price the middle class and everybody working to get into the middle class out of a college education," he said, noting that the average student who borrows graduates about $26,000 in debt. Here's a look at the plan and affordability efforts.

1. What did Mr. Obama propose?

A new college rating system would help measure value – based on such factors as affordability, graduation rates, alumni employment, and how much colleges are assisting disadvantaged students.

The Department of Education will hold forums and set up the system within two years. By 2018, the president would like federal college aid to be tied to the rating system, but that, along with much of the plan, would require approval from Congress, which many see as unlikely.

To encourage state reforms and better state funding for higher education, Obama proposed a $1 billion Race to the Top grant competition for states. To promote innovation to drive down costs – such as the use of massive open online courses (MOOCs) – he proposed a $260 million grant program. And to make student debt manageable, Obama wants to make all college borrowers eligible for "Pay as You Earn," capping repayment of federal loans at 10 percent of monthly income.

2. What's been some of the response among academics and lawmakers?

Democratic lawmakers and interest groups representing students and borrowers lauded the broad ideas. The plan could "truly shake up the broken status quo of our higher education system," said Aaron Smith, co-founder and executive director of Young Invincibles, which advocates on behalf of 18-to-34-year-olds.

Higher-education associations largely support the thrust of it as well, but they're cautious or skeptical about a rating system because of the complexities involved.

Rep. John Kline (R), chairman of the House Education and the Workforce Committee, said that "imposing an arbitrary college ranking system could curtail the very innovation we hope to encourage – and even lead to federal price controls." But he said the committee will look at the proposals.

3. Why have college costs been rising so much?

There's debate about that. One key factor for public institutions is a significant decline in funding from many state governments. States spent about $10.50 per $1,000 in per capita state income on higher education in 1975, but only about $6 in 2012, according to one analysis.

Some observers say colleges have little incentive to cut costs because students and parents place such a high priority on college and are willing to take on debt. They say colleges are spending more than they should on amenities and administration.

Others say technology has driven down costs in other industries, but higher education is still largely (and understandably) dependent on personal interactions with professors.

4. Will Obama's plan work?

Obama's push could encourage consumers to keep pressure on colleges to deliver value. But his proposal to tie rankings to federal aid is easier said than done, and it could have unintended consequences, many say. Also, the federal government is unlikely to be able to tackle the problem in a major way on its own, and "we aren't going to be able to tweak our way through this," said Patrick Callan, president of the Higher Education Policy Institute in San Jose, Calif., in an interview with Monitor reporter Amanda Paulson.

5. Is anything else happening to promote affordability?

About 500 public colleges and universities are participating in Project Degree Completion to help students move through college in a timely way. Some colleges now offer three-year bachelor's degree programs. And a growing number of private, nonprofit colleges are cutting tuition, matching public-university tuition, or offering guarantees that students can graduate in four years (or finish at no cost if they don't).

One new resource: College Factual (www.collegefactual.com), which offers value rankings and enables users to tailor comparisons.

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