Obama, on bus tour, to unveil new strategy to curb college costs
College costs increased 600 percent in the past 30 years, and federal aid enabled it. What's needed is a 'shake up,' Obama told supporters – and it may not be popular with 'some who've made higher education their business.'
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The “stick” approach to the situation – cutting off aid unless colleges curb rising costs – could cause unintended consequences, perhaps leading schools to start favoring students who can pay the full sticker price or sacrificing quality, says Richard Vedder, director of the Center for College Affordability.Skip to next paragraph
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But he also sees the escalating levels of loans as the major factor that needs to be changed. He urges government to start cutting back on financial aid, beginning with limiting programs for higher-income students or cutting off the tuition tax credit, which mainly benefits upper-income families. Federal limits on the number of years students can get grants and loans, to give colleges and universities more of an incentive to ensure that students graduate in a reasonable amount of time, could also be an option, he says.
“You don’t have to kill these programs overnight and say, 'We’re done with it.' That would wreak havoc and cause hardship,” says Mr. Vedder. “But if you don’t do something with these programs in terms of cutting them back, these programs are going to get bigger and fester.”
He sees little that the Obama administration can actually accomplish to rein in costs, given that the federal government lacks direct leverage (the way loans and grants are currently structured, they go directly to students, not to institutions) and that the main drivers of college cost – state funding levels and human resources – are outside its control.
But others say that, whatever Obama proposes this week, tackling the college-cost question long-term will require big, creative solutions – and that the federal government may well play a role simply in bringing the various players together.
Measures the administration has already taken – to improve transparency, increase the number of Pell grants, and reduce the complexity of the financial aid application process – have all been helpful, says Pat Callan, president of the Higher Education Policy Institute in San Jose, Calif. They’re simply insufficient given the magnitude of the problem.
“None of the state and federal policy infrastructure was designed for an era in which many more people must have higher education and in which demographics suggest that we must get many of the groups we’ve never served before into the mainstream,” says Mr. Callan. “We aren’t going to be able to tweak our way through this.”
Restricting or reducing federal loans and grants just punishes students for the failures of institutions, he says, and any real solution is going to have to involve a far-reaching conversation that involves the federal government, states, and higher education institutions, and gets buy-in from all three.
Technology, as well, may be part of the solution, as institutions begin to find ways to deliver quality education for much lower cost.
Laitinen of New America says one of the suggestions Obama put forward in his budget, which got little attention at the time, could have a lot of potential in the long run: paying nonaccredited providers on the back end for free two-year degrees that are of demonstrably high quality, accepted by employers, or four-year institutions.
Under this idea, the government would provide an incentive for institutions or individuals to put together free programs – perhaps using already existing Massive Open Online Courses (MOOC), but cobbling them together with strong student support, or creating new online courses – that are rigorous and high quality.
“You’d be going from a $35,000 degree to something free for students,” says Laitinen. “It could be a game-changer.”
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