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President to President

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President to President
Molly Corbett Broad's weekly email newsletter to higher education leaders.

President to President, January 23-27, 2012

Vol. 13, No. 2

  • President Discusses Higher Education Plans at University of Michigan
  • IN BRIEF: Foreign Gift Disclosure Reports Due Jan. 31; Register Now for ACE's Annual Meeting

Like many of you, we have been anxiously waiting for details on the higher education proposals offered by President Obama in his State of the Union address Tuesday night. The president expanded on his ideas this morning at the University of Michigan, and what we heard regarding the overhaul of campus-based aid and other programs is a complex, multi-faceted and thoughtful plan that will take some time to sort through.

The president's plan has five parts: 1) creating a "Race to the Top" for college affordability; 2) establishing a "First in the World" fund at the Fund for the Improvement of Postsecondary Education; 3) increasing support for campus-based aid; 4) better information for families; and 5) maintaining the interest rate for federal student loan programs at 3.4 percent.

One particularly notable item on this list is the change to campus-based student aid. The president is proposing to revise the eligibility formula for these programs, which include Perkins Loans, Federal Work-Study and Supplemental Educational Opportunity Grants, in order to reward institutions that keep net tuition down, provide good value and serve needy students well. The Perkins Loan Program would receive $8 billion (a portion of which may come from recalling institutional revolving funds)—up significantly from the current $1 billion—and funding for Federal Work-Study would be doubled. This funding would be tied to demonstrated success in improving affordability. While we support the president's goal, we are concerned about how such a provision would be implemented.

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. The First in the World Fund would provide $55 million for grants to help public and private colleges and non-profit organizations to develop and test "breakthrough" strategies to boost productivity and scale up innovative and effective practices. These ideas might be familiar to those of you who attended the White House meeting on cost and affordability last year, as will the proposal of a "scorecard" for all degree-granting institutions to provide essential information to students and families about costs, graduation rates and potential earnings upon graduation.

We appreciate that the Obama administration recognizes colleges and universities play a significant role in economic recovery and expansion, which was clear in Tuesday night's speech just as it has been in the past two State of the Union addresses. Along with his affordability plan, the president proposed a new initiative to train and place 2 million Americans in jobs through partnerships between businesses and community colleges. He 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.

If approved by Congress, the president's plan would provide an enormous amount of money to help students and families, and I know that we all are ready to do everything we can to help enhance college access and completion. Our central concern is the likelihood that the proposal will move decision-making in higher education from college campuses to Washington, DC.

There are still many unanswered questions and, as always, the devil is in the details. But we look forward to working with the administration and Congress moving forward.


Colleges and universities that have received charitable gifts of $250,000 or more from foreign sources in the last six months must file a disclosure report with the U.S. Department of Education by Jan. 31. Institutions must submit their foreign gift reports using Federal Student Aid's Electronic Application (E-App). The information that must be completed can be found in Section K, Question 71.

Lastly this week, I hope you will be joining us March 10-13 for ACE's 94th Annual Meeting, which will be held in Los Angeles, CA. The opening plenary and official start of the meeting will feature the Robert Atwell Lecture, to be delivered this year by Michael Crow, president of Arizona State University. First-time attendees can now watch online videos to learn why other higher education leaders find the meeting so valuable. Follow @ACEducation on Twitter and look for the hashtag #ACE2012 for more information on the meeting as it becomes available.

Molly Corbett Broad
President of ACE