Obama right to try to put brakes on college costs

America has a world-beating higher education system, but costs have been spiraling out of control for years even amid signs of deteriorating quality. Graduates, meanwhile, are struggling with a trillion-dollar mountain of student debt that has grown fivefold in little more than a decade.

So President Barack Obama's admittedly election year-spurred proposal to link some federal higher education aid to how well colleges contain costs is a welcome step. Indeed, the increasing availability of low-cost loans and other government assistance over the years has only subsidized soaring college expenses. It's time to roll back the perverse incentives built into the system.

Obama proposes to do this by expanding the Perkins loan program to $8 billion (from $1 billion), but changing the way it's distributed to reward schools that keep tuition down and serve needy students. Another $1 billion would fund a grant competition, similar to the Race to the Top in K-12 education, to reward states that hold down college costs. Congressional approval would be needed, but the Perkins money would fund loans eventually repaid by students, so the cost to Uncle Sam wouldn't be huge. The president also wants schools to make it easier for families to compare financial aid packages, and to disclose how much their graduates earn, so applicants can gauge the likely financial payoff of their big investment.

These proposals come at a tough time for colleges. State institutions in many places, including New York, have seen their funding cut by cash-strapped lawmakers, resulting in campus budget tightening and tuition hikes. Many universities that rely heavily on their endowments haven't fully recovered from the financial crisis of 2008. And in these hard times, students need more financial aid.

Yet colleges and universities have helped dig the hole they are in. Even taking account of financial aid, the cost of a year at a public institution (most students attend these) consumed 25 percent of a middle-income family's earnings in 2008 -- up from 18 percent in 2000. At private schools, the cost spiral is worse.

This can't continue. Higher education simply has to become more efficient. Enough already with the gilt-edged student unions and athletic facilities. And while research is vital, some effort must be made to distinguish between advancing the frontiers of knowledge, on the one hand, and fruitless pettifoggery on the other. Campuses must renew their focus on teaching as their core mission, and exploit the power of the Internet as a cost-effective way to extend their reach.

Unfortunately, rising costs haven't necessarily led to rising quality. Students study less than they did in the 1960s, and half fail to get a degree within six years. The use of part-time faculty has boomed. Grade inflation is rampant.

It doesn't take a PhD to see that higher education has a lot of evolving to do, and Obama's proposals strongly signal which way it must go. Academics may not like it, but money talks on campus, just like everywhere else.