Obama presents plan to cap tuition costs

President Barack Obama proposed new federal policies Jan. 27 that could tie federal funding to tuition increases – a move that he hopes will encourage schools to tackle the rising issue of college affordability.

But a top University administrator remains doubtful about the impact Obama’s latest efforts will have on GW because of the University’s commitment to only inflation-level tuition increases.

Obama’s most recent proposals, issued in a speech at the University of Michigan, call for some federal aid programs – including the Federal Supplemental Educational Opportunity Grant program, the Federal Perkins Loan program and Federal Work Study – to be linked to schools’ tuition rates to deter colleges from hiking up costs at students’ expense.

Currently, federal funds are allotted without regard to the rate at which tuition increases. Any changes to such policies would require approval from Congress.

The changes would be implemented based on the rate at which tuition increases annually – not the overall net tuition of each institution. Despite GW’s generally high sticker price, tuition has increased about 3 percent annually over the last four years – less than at other urban schools over the same time period – reflecting University President Steven Knapp’s priority to keep tuition costs down.

Associate Vice President for Financial Assistance Dan Small said top administrators are aware of affordability concerns, but said he couldn’t predict if or how the new policy would affect GW’s funding without more details.

Financial aid experts cited in the Jan. 30 Chronicle of Higher Education said the move would likely have more impact on public universities that have been forced to hike up tuition quickly to account for federal revenue lost during the recession.

The suggested policy “shifts aid from schools with rising tuition to those acting responsibly, focused on setting responsible tuition policy, providing good value in education and ensuring that higher numbers of low-income students complete their education,” according to a White House press release.

“In this economy, there is no greater predictor of individual success than a good education,” Obama said during the visit to the University of Michigan.

Obama, who said he was dependent on scholarships and student loans to attend college himself, did not specify how much funding would be cut from schools that do not follow the directives, nor did he lay out a time frame by which he hopes Congress would act.

In his Michigan speech, Obama also reiterated ideas to reduce tuition expenses that he pitched during his most recent State of the Union address Jan. 24. His proposals – to keep student loan interest rates at 3.4 percent, double Federal Work Study jobs and extend tax credits for tuition – must also be approved by Congress. Obama encouraged students to reach out to their representatives to advocate for the changes.

Small was skeptical that Congress would vote to approve increased funding as November’s election nears.

If the policies announced last week gain approval from Congress, it is difficult to tell in what ways they could affect GW, Small said, echoing his reservations during the fall. Small said he would welcome additional federal funding, but remains unsure what to expect without more details about how increased federal money may be distributed among community, private and public institutions.

“If you really read between the lines, those increases aren’t really coming in the direction for an institution like GW,” Small said of potential boosts to Perkins and Federal Work-Study awards. The money would likely be funneled to schools new to the work study program and community colleges, Small estimated.

Specifics of the plan were intentionally left vague to allow input from colleges, Zakiya Smith, senior White House education adviser, said Tuesday, according to The Chronicle of Higher Education.

The vast majority of GW’s financial aid pool is institutionally funded rather than federally supported. The University doled out an internal aid pool of more than $142 million in the 2009 to 2010 academic year, compared to $9.1 million in federal grants and Federal Work Study funds, according to the most recent internal data available.

This year’s internal aid pool is $160 million. The Board of Trustees will vote on next year’s allotment at their meeting Feb. 10.

Obama also discussed mandating a “College Scorecard,” which would provide prospective students with a uniform document showing each college’s costs, graduation rates and potential future earnings so they could better anticipate the financial implications of attendance.

“We want a country where everybody has a chance… We don’t want to become a country where a shrinking number of Americans do really well, while a growing number barely get by,” Obama said. “That’s not the future we want.”

These initiatives come three months after Obama announced his “We Can’t Wait” campaign to rein in student loan debt, which Small said would help few GW students because they are usually able to pay off their student loans, so extensions Obama put in place would have little effect.

Some experts remain optimistic about the president’s focus on higher education. Pauline Abernathy, vice president of the Institute for College Access and Success, praised Obama’s efforts.

“By continuing to invest in Pell Grants, other need-based student aid, and well-targeted tax credits, keeping student loans affordable and manageable, and helping college hopefuls be smart consumers, the plan takes steps that directly impact college affordability for millions of American families,” Abernathy said in a Jan. 27 press release.

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