Obama unveils plan to improve college costs

President Barack Obama Thursday proposed a plan to tackle soaring U.S. education costs with a new system that judges colleges and universities on their financial value and ties those ratings to disbursement of federal aid.

The president, who has spent much of the summer promoting new ideas to rev up the economy, unveiled his proposals at the start of a campaign-like bus tour through New York and Pennsylvania.

Here’s what the plan calls for:
-- The Education Department to institute a new ratings system before the 2015 school year that would allow students and parents to select schools based on the best value for the money.

-- Obama would then push Congress to tie federal student aid to these ratings by 2018, creating an incentive for schools to keep their costs in check.

-- The plan also aims to ease the pain of federal student loan debt by limiting those payments to 10% of borrowers’ monthly income.