Obama proposes ratings system to rein in college costs

President Barack Obama speaks at Henninger High School

President Barack Obama speaks at Henninger High School in Syracuse. (Aug. 22, 2013) (Credit: AP)

BUFFALO - President Barack Obama proposed an extensive plan Thursday to rate colleges based in part on affordability and tie those ratings to federal financial aid awards as part of a plan to reduce higher education costs.

The new system would be implemented by the 2015-16 academic year. Along with new ratings, the plan would evaluate colleges on average tuition, student-loan debt and graduation rates, according to details released by the White House. The ratings system would allow for students attending highly rated schools to receive larger grants and more affordable student loans.

Additionally, the plan calls for basing students' loan payments on their ability to pay. The Obama administration says current students graduate college with an average of $26,000 in debt.


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"We're going to start rating colleges. What we want to do is rate them on who is offering the best value so students can get a better bang for their buck," Obama said at the University at Buffalo, where a capacity crowd packed the basketball arena hours before the president arrived. The student-heavy crowd stood through most of Obama's address, flashing camera phones and applauding enthusiastically.

Obama announced the plan on a two-day bus tour through upstate New York and Pennsylvania. He spoke at a Syracuse high school Thursday night and is scheduled to visit Binghamton University Friday.

 

Part of White House strategy

Throughout the summer, the White House has been seeking to keep the president's public agenda centered on middle-class economic issues as a way to rally public support for his positions ahead of looming fiscal battles with congressional Republicans. And Obama, in an email to supporters this week, said a big part of middle-class security includes fundamentally rethinking how to pay for higher education.

Obama said congressional Republicans are thinking: " 'Maybe we should shut down the government if we can't shut down 'Obamacare.' That won't grow the economy. That won't create jobs."

Instead, he said, Congress should focus on the practical problem of college affordability.

"Some form of higher education is the surest path to the middle class. But costs have become a barrier," Obama said. He said that while college tuition rose 250 percent over the past three decades, the average family income grew just 16 percent.

The chairman of the state Republican Party called Obama's proposal a "nice idea," but "unworkable."

"He is putting a spotlight on a major issue: college affordability," said state GOP chairman Ed Cox, a former member of the SUNY Board of Trustees. "But there's no way . . . His vision with respect to government being able to rank institutions of higher education is unworkable."

 

Rewards for 'value' colleges

Under the Obama plan, by 2018 federal aid to colleges would be based in part on "value" as measured by new ratings system. It would steer federal-aid bonuses to colleges that graduate more students with Pell grants -- which go to needy students.

"I think we should rate colleges based on opportunity: Are they helping students from all sorts of backgrounds?" he said.

He said his plan would ensure borrowers can afford their federal student loan debt by allowing them to cap their payments at 10 percent of their monthly income.

Obama delivered largely the same speech in Syracuse, but at a much more intimate setting. At a small basketball gym at Henninger High School, he promoted his plan before about 1,500 inner-city high school students.

"Michelle and I, we didn't come from rich folk," Obama said. He said most of his college debt came from attending law school -- and it took him years to pay off. "I didn't pay back my student loans til I was almost a U.S. senator . . . I was in my 40s," Obama said.

At one point, a heckler holding a "Free Bradley Manning" sign interrupted the president. Syracuse media identified the heckler as Ursula Rozum, a Green Party candidate for Congress in 2012. Students shouted her down, saying they wanted to hear Obama. When the students booed her, Obama praised the heckler for being "very polite."

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