Obama administration talks college tuition

If colleges can’t keep their tuition from going up each year, then the amount of federal… If colleges can’t keep their tuition from going up each year, then the amount of federal funding they receive will go down — if President Barack Obama gets his way.

“If tuition is going up faster than inflation, faster than even health care is going up, no matter how much we subsidize it, sooner or later, we’re going to run out of money,” Obama said in a speech to students at the University of Michigan on Friday morning. “And that means that others have to do their part. Colleges and universities need to do their part to keep costs down as well.”

In his State of the Union address last week, Obama laid out a blueprint to make an economy that’s built to last — and this includes tackling rising tuition costs. He is proposing new reforms to help students deal with high tuition and placing the responsibility on the government, states, universities and administrations to lower the costs.

The proposals, which require congressional approval, would seek to tie colleges’ eligibility to receive federal campus-based aid programs, including Perkins loans and work-study jobs, to their ability to increase affordability and keep value high for students.

Pitt spokesman John Fedele was unavailable for immediate comment on how these proposals would affect the University.

The Department of Education listed Pitt’s $14,154 in-state tuition last year as the second most expensive nationally among public universities. After a 22 percent cut in state funding in June, Pitt raised in-state tuition 8.5 percent.

Over the summer, Pitt officials attributed the ranking to a low level of state support for higher education — the 46th lowest in the country.

On Friday afternoon, U.S. Secretary of Education Arne Duncan and Director of the Domestic Policy Council at the White House Cecilia Muñoz outlined Obama’s plans in a conference call.

“In a competitive economy, we can’t afford for college to be a privilege,” Muñoz said.

He said that for the first time, federal student aid is being tied to tuition policies.

Duncan laid out Obama’s four proposals. They include rewarding schools that keep college affordable and net tuition down; new incentives for colleges to hold down costs, including a $1 billion ‘Race to the Top’ challenge for states; creating a scorecard to make it easier for families and prospective students to compare schools; and maintaining the administration’s current commitment to helping students and calling on Congress to keep their commitment to federal student aid.

The last proposal includes keeping the interest rate on student loans at 3.4 percent, instead of having it double to 6.8 percent in July. It also includes making the American Opportunity Tax Credit, a tuition tax credit, permanent and doubling the number of work-study jobs over the next five years.

The officials on the call said that in order to judge colleges’ value and tuition, the measure to which their federal aid will be tied, the government will look at more than just tuition. They will also measure the net price, graduation rates, repayment rates on student loans and support structures, as well as what the colleges are doing to serve disadvantaged students.

Duncan said that more than 40 states cut their higher education budgets last year. These proposals are meant in part to promote shared responsibility on the states to deal with tuition costs.

“States can’t keep cutting higher education budgets and expect universities to make up the difference in tuition,” he said.

Obama said that tuition is going up faster than inflation and faster than health care costs, and the government will soon run out of money if it keeps subsidizing tuition costs. Others, including colleges and universities, need to do their part to keep costs down, he said.

“Higher education is not a luxury,” Obama said on Friday. “It’s an economic imperative that every family in America should be able to afford.”

Obama’s proposals to lower costs

1. Reforming student aid to promote affordability and value: Reform federal campus-based aid programs to reward colleges that keep tuition affordable, provide good value and serve needy students well and shift aid away from colleges that fail to keep tuition down.

2. Race to the Top Competition: A $1 billion investment in a new challenge to reward states that take action to keep college costs low.

3. Better data for families and students to choose the right college: A college score card for all degree-granting institutions to provide essential information about college costs, graduation rates and potential earnings for prospective students and families to compare colleges.

4. Federal support to rising college costs: Keep interest rates on student loans at 3.4 percent, make the American Opportunity Tax Credit permanent and double the number of work-study jobs over the next five years.