BUFFALO, N.Y. — Calling higher education an “economic imperative,” President Obama is pushing for a new government rating system for colleges that would judge schools on affordability and performance, and ultimately determine how federal financial aid is distributed.
The plan, which Obama rolled out as he opened a two-day campaign-style bus tour of college campuses, would create a rating system beginning in 2015 to evaluate colleges on tuition, the percentage of low-income students, graduation rates, debt of graduates and graduates’ average earnings.
As an incentive for schools to make improvements in these areas, federal financial aid would be awarded based on those ratings. Obama said he could create the ratings system through executive action, but the plan to reallocate federal aid based on the ratings would require congressional approval. He said he would ask Congress to link the new rating system to the way federal financial aid is disbursed, with students attending highly rated schools receiving larger grants and more affordable student loans.
“It’s time to stop subsidizing schools that are not producing good results and reward schools that deliver American students of our future,” Obama told more than 7,000 at the University at Buffalo.
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The average tuition at public four-year colleges has increased by more than 250 percent in the past three decades, while incomes for typical families grew by only 16 percent, according to College Board and census data that Obama cited. This trend, he said, is a “crisis” and represents “a barrier and a burden to too many American families.”
Obama seeks to make college more affordable in two ways. First, the ratings would reward colleges that offer “value.” A school that holds down average tuition and student-loan debt could rise in the ratings, which means the system would act as an incentive for colleges to keep those costs as low as possible.
In addition, higher-rated schools would qualify for larger federal grants, making them more affordable for students.
The president offered his college-affordability proposals at the beginning of a two-day bus tour through upstate New York and Pennsylvania. It is part of a campaign to highlight proposals that his administration says will help the middle class.
The proposal comes as the White House prepares for battle with House Republicans on a series of fiscal issues in the fall, and it is not clear whether he can succeed in persuading lawmakers to back this or any other initiative.
Rep. John Kline, R-Minn., chairman of the House Committee on Education and the Workforce, applauded Obama’s goal of promoting innovation and competition. But he added, “I remain concerned that imposing an arbitrary college-ranking system could curtail the very innovation we hope to encourage — and even lead to federal price controls.”
Because the details of the plan have not been announced, it’s difficult to know how Washington’s public colleges and universities would fare. However, although tuition has risen precipitously in the past four years because of state budget cuts, the state’s four-year schools, taken together, have some of the best graduation rates in the nation.
All six of Washington’s four-year schools have low student-loan default rates, and students graduate with less debt than the national average. About 22 percent of the University of Washington’s undergraduates receive federal Pell grants for low-income students, and 26 percent of Washington State University’s undergraduates receive the grants, showing that the state’s biggest universities are reaching a large number of low-income students.
In fact, the biggest worry among state education leaders is that not enough Washington high-school graduates go to college and that the state’s higher-education funding lags behind many other states.
“The University of Washington already scores well on many of the factors the president is promoting,” UW President Michael Young said in a prepared statement. “The state of Washington is indeed fortunate to have one of the best universities in the world at a cost that is relatively low for students, and we intend to keep it that way.”
Seattle Times higher-education reporter Katherine Long contributed to this report. Material from The Associated Press is included in this report.