President Obama visited the University of Michigan this morning to expand on the higher education plans he briefly outlined in his State of the Union address Tuesday night.
The president is proposing a number of changes to current programs as well as several new initiatives aimed at keeping college affordable for students and families.
One of the most significant ideas for higher education in the president’s Blueprint for an America Built to Last is a change to the eligibility formula for campus-based aid, which includes Perkins Loans, Federal Work-Study and Supplemental Educational Opportunity Grants. The modified formula would reward institutions that keep net tuition down, provide good value and serve needy students well.
The Perkins Loan Program would receive $8 billion, up significantly from the current $1 billion, and funding for Federal Work-Study would be doubled. These funds would be tied to demonstrated success in improving affordability.
The president is also proposing a $1 billion Race to the Top competition for higher education to reward states that keep tuition down at public universities. To win money, states would have to maintain funding levels for higher education and help promote on-time graduation.
Another competition, the First in the World Fund, would provide $55 million for grants to help public and private colleges and non-profit organizations develop and test “breakthrough” strategies to boost productivity and scale up innovative and effective practices.
Along with his affordability plan, the president put forward a new initiative to train and place 2 million Americans in jobs through partnerships between businesses and community colleges. He also called on Congress to stop the interest rate on subsidized Stafford student loans from doubling on July 1 and to make permanent the American Opportunity Tax Credit, which provides up to $10,000 for tuition over four years of college.
ACE President Molly Corbett Broad praised the president’s plan as a “thoughtful and important proposal” that would provide enormous support to students if approved by Congress.
However, she also expressed concern that “it will move decision-making in higher education from college campuses to Washington, DC.”
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