Obama targets colleges over tuition hikes

ANN ARBOR, Mich. -- President Barack Obama fired a warning at the nation's colleges and universities Friday, threatening to strip their federal aid if they "jack up tuition" every year. He vowed to give the money instead to schools showing restraint and value.

Obama can't proceed, though, without the OK from Congress, where the reaction of Republican lawmakers ranged from muted to skeptical. Higher education leaders worried about the details and the threat of government overreach, and one dismissed it as mere election-year "political theater."

Average tuition and fees at public colleges rose 8.3 percent this year and, with room and board, now exceed $17,000 a year, according to the College Board.

Obama delivered his proposal with campaign flair, mounting a mainstream appeal to young voters and struggling families. He said higher education has become an imperative for success in America, but the cost has grown unrealistic for too many families, and the debt burden unbearable.

"We are putting colleges on notice," Obama told an arena packed with cheering students at the University of Michigan.

"You can't assume that you'll just jack up tuition every single year. If you can't stop tuition from going up, then the funding you get from taxpayers each year will go down."

Obama is targeting only a small part of the financial aid picture -- the $3 billion known as campus-based aid that flows through college administrators to students. He is proposing to increase that amount to $10 billion and change how it is distributed to reward schools that hold down costs and ensure that more poor students complete their education.

The bulk of the more than $140 billion in federal grants and loans goes directly to students and would not be affected.

Rising tuition costs have been attributed to a variety of factors, among them a decline in state dollars and competition for the best facilities and professors. Washington's leverage to take on the rising cost of college is limited because American higher education is decentralized, with most student aid following the student. And that's not counting the legislative gridlock.

"If you were a betting person, you would not bet on it getting done, simply because the political atmosphere in Washington is so poisonous," said Terry Hartle, senior vice president at the American Council on Education, an organization that represents colleges in Washington.

Rep. John Kline (R-Minn.), chairman of the House Education and Workforce Committee, said Obama put forward "interesting ideas that deserve a careful review."

But Rep. Virginia Foxx (R-N.C.), who leads a House panel with jurisdiction over higher education, said Obama's plan should have tackled federal regulations that she said contribute to the problem.