TXEXplainer: President Obama’s College ‘Shake Up’

President Obama has announced new policies to ‘shake up’ higher education and keep the cost of college down. Here’s what you need to know.

TXEXplainer: President Obama's College Tour

He’s beefing up the “College Scorecard.” Earlier this year, Obama announced the scorecard, an online resource meant to help students and families pick the school that’s right for them—and their budget. We even tested UT on the major aspects that the scorecard takes into account. Obama is actively promoting the website. In the coming years, he wants to build even more data into the website and rank colleges based on the scorecard.

But here’s the big news: by 2018, Obama wants to base federal student financial aid on those rankings. That’s right. How well colleges perform after all that data is collected and crunched will help determine whether students get larger grants and more affordable loans. The better your university does on the scorecard, the more preferential your financial aid package. It’s designed to reward and encourage high-performing institutions.

Pay-as-you-earn might become more common. The White House is looking to expand an option to cap loan repayment at 10 percent of the borrower’s monthly income. For many, it may be a welcome change, but as the Washington Post reports, it doesn’t go as far as some want:

The plan doesn’t go as far as Reps. Tom Petri (R-WI) and Jared Polis’s (D-CO) ExCEL Act, which would make income-based repayment the norm for federal student loans. That plan eliminates loan forgiveness after 20 years of income-based payments (10 years for public service careers), which could provoke administration opposition, but it also caps the amount of interest borrowers will have to pay.

Obama wants to offset declining state appropriations. A fact sheet released this week notes the national trend of declining state support for public universities. As we’ve noted before, Texas is no different, with state support for UT going from 47 percent in the mid-1980s to around 13 percent today. Now, the federal budget includes $1 billion dollars to help states fund colleges—and avoid passing the cost of state cuts onto the students through higher tuition.

And he proposes to tie funding (and financial aid) to innovation and learning, not just enrollment. Not unlike the outcomes-based model that garnered support but ultimately failed in the Texas Legislature this year, the feds want to tie aid to completion, incentivizing students to finish, and encourage new types of education that might result in higher student success rates. Here’s how the White House puts it:

To demonstrate what works, President Obama has proposed a new $260 million First in the World fund to test and evaluate innovative approaches to higher education that yield dramatically better outcomes, and to develop new ways for colleges to demonstrate that they are helping their students learn. In addition, the Department of Labor is planning to grant an additional $500 million to community colleges and eligible four-year colleges and universities next year.A portion of these resources will be used to promote accelerated degree paths and credentials that would drive more high quality and affordable options for adult workers and students.

Editor’s Note: The Texas Exes takes no position on any of the above proposals. Photo courtesy Neon Tommy via Flickr Creative Commons.


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