President Barack Obama has unveiled a new plan to make college more affordable for middle class Americans, who’ve struggled to pay for degrees as college costs have skyrocketed.
Obama will discuss his plan during a two-day bus tour of colleges in New York and Pennsylvania, starting at the State University of New York at Buffalo today.
The reason for reform, according to the White House: Average tuition at public four-year colleges has increased by more than 250 percent over the past 30 years while typical family incomes grew by only 16 percent.
Undergraduate students paid an average of $15,900 a year to attend a four-year program in 2011, according to the National Center for Education Statistics, and piled on the loans to cover it. The average student borrower now owes $26,000 at graduation.
Obama’s plan proposes to rate colleges by the 2015 school year based on outcomes, like graduation and transfer rates and earnings of graduates; affordability, including average tuition, scholarships and loan debt; and access, as measured by the percentage of lower-income students who attend.
“All the things we’re measuring are important for students choosing a college,” a senior administration official told the New York Times. “It’s important to us that colleges offer good value for their tuition dollars, and that higher education offer families a degree of security so students aren’t left with debt they can’t pay back.”
By 2008, Obama wants to the federal government to tie student financial aid to these ratings, incentivizing students to attend schools that provide the best value by offering larger Pell Grants and better rates on student loans at those institutions. This will require Congressional approval.
Obama’s plan also aims to alleviate more graduates’ debt burdens by allowing all student borrowers to cap their federal student loan payments at 10 percent of their monthly income. Currently, only grads making $60,000 or less a year are eligible for income-based student loan repayment.
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