What's Next For Higher Ed: Control Costs or Lose Federal Funding?

Published on January 30, 2012
by The Educated Reporter in College Costs, For-Profit Higher Education, Student Loans and Financial Aid, Higher Education

Excerpt from Emily Richmond's article.

President Obama's State of the Union address included a gauntlet of sorts for the higher education community: Control tuition costs or face consequences.

The next day I spoke with Amy Laitinen, formerly a a former policy advisor for the U.S. Department of Education, who is now senior higher education policy analyst for Education Sector, a nonpartisan think tank in Washington, D.C..

Laitinen said she had expected Obama to talk about college costs "But I didn’t expect him to be so bold ... I didn’t expect him to pull out the financial aid guns and tell colleges he was putting them on notice to get tuition costs in line."

Just how much is at stake here? The figure might surprise you. There's over $150 billion in federal student aid awarded annually.

"That's a huge lever for change that’s really been underutilized," Laitinen said. "In a lot of ways he really dropped a bomb. It will be interesting to see what happens with that and how colleges and universities respond."

Obama had more details to share when he spoke at the University of Michigan at the end of the week, including a proposal for specialized student loans that will depend on an institution's willingness (and ability) to keep costs in line, and to demonstrate "value." He also suggested a "college scorecard" to make it easier for parents and students to judge the overall performance of the campus, and determine whether the tuition fits a family's budget. The twin goals should be to maintain affordability without sacrificing quality, Obama said. (Click here for the official White House fact sheet on Obama's Blueprint to College Affordability.)

Criticism of his proposal has been fast and furious among higher education officials and some experts, who argue the president's plan doesn't address the serious fiscal and programatic issues facing colleges and universities, including decreased state funding...