National News

Obama unveils plan to control college costs

Posted: Jan 27, 2012 9:19 AM by CNN

College affordability took center stage Friday for President Barack Obama as he made the final stop on a three-day road trip highlighting themes from the State of the Union address this week.

In an appearance at the University of Michigan in Ann Arbor, the president outlined a series of new initiatives designed to control spiraling college costs and reform financial aid programs.

"We want a country where everybody has a chance," Obama said. America should be a "big, bold, generous country where everybody gets a fair shot."

Noting that student loan debt now exceeds credit card debt, the president declared Washington is "putting colleges on notice. You can't assume you'll just jack up tuition every year."

"We should push colleges to do better," he said. "We should hold them accountable if they don't."

Specifically, the administration wants to leverage $10 billion a year in federal aid, restraining costs by providing more assistance to schools that hold tuition down while cutting aid to those that do not. Obama is also pushing for the creation of a $1 billion competition encouraging states to contain public tuition rates.

In addition, the president wants to establish a $55 million competition to spur new college strategies encouraging greater educational productivity and student outcomes. He also wants to create a "college scoreboard," giving families easy-to-read information about individual college costs and graduation rates, among other things.

Finally, the president is pushing Congress to keep interest rates low for current student loan borrowers while doubling the number of work-study jobs over the next five years.

Obama warned Friday that rising tuition costs are now threatening to surpass the ability of government to help pay for them. Between 1999 and 2010, inflation adjusted prices for undergraduate tuition, room and board rose 37% at public schools and 25% at private colleges, according to the National Center for Education Statistics, part of the Education Department.

"We can't keep subsidizing (skyrocketing) tuition," he said. "Sooner or later we're going to run out of money."

College affordability has been a recurring theme for the Obama administration. In 2010, Congress approved a bill that restructured the federal student loan program and redirected $61 billion towards post-secondary education spending, according to the National Association for College Admission Counseling.

Obama's 2009 stimulus plan also included a temporary $2,500 tax credit for higher education expenses, which the president has now proposed making permanent.

Obama's speech at the University of Michigan was his second there since taking office. He delivered the commencement address in Ann Arbor in 2010.

On Thursday, Obama spoke in Nevada and Colorado highlighting increased federal investment in clean energy during his time in office. He also discussed plans to sell off oil and gas leases on 38 million acres of the Gulf of Mexico seafloor as part of a new domestic energy push.

The leases could yield as much as 1 billion barrels of oil and 4 trillion cubic feet of natural gas, the Interior Department estimates. The sale scheduled in June will be the second since the Deepwater Horizon disaster of 2010 when nearly 5 million barrels of crude spewed into the Gulf.

Obama mentioned the planned lease sales in his remarks at Buckley Air Force Base in Aurora, Colorado, which has a 1-megawatt solar array and last year test-piloted jets that run on advanced biofuels.

Republicans have been fiercely critical of Obama's energy stance, questioning investments in certain clean energy companies as well as the recent rejection of a permit to build a pipeline to transport oil from Canada's tar sands to the Gulf of Mexico.

Obama, however, insisted Thursday that his energy plan is an "all-out, all-in, all-of-the-above strategy that develops every available source of American energy."

Among other things, the president promised more federal assistance for local governments to upgrade their automotive fleets while also pushing new tax incentives for cleaner corporate vehicles.

Obama also said the administration is working to develop up to five highway natural gas corridors, and he announced a new competition to encourage the development of breakthroughs for natural gas vehicles.