President outlines college affordability plan.

February 02, 2012

On January 27, President Obama went to the University of Michigan to announce his “Blueprint for Keeping College Affordable and Within Reach for All Americans,” a set of proposals to address the rising costs of postsecondary education in order to meet a national goal of having the highest share of college graduates in the world. The blueprint expands on concepts the President outlined in his State of the Union address, and includes proposals designed to reward schools that keep college affordable; create new incentives to promote affordability and quality; empower families and students to be informed consumers; and redouble federal support to tackle college costs.

Among other things, the blueprint includes recommendations to:

  • Revise the current formula for Supplemental Educational Opportunity Grants (SEOG), Perkins Loans, and the federal Work Study program to reward institutions that offer low new tuition price or restrain tuition growth, offer quality education and training, and enroll and graduate higher numbers of low-income students. The proposal would increase campus-based aid funding to $10 billion per year, although the administration suggests that there would be no additional cost to taxpayers because the expansion would largely come through the Perkins Loan program.
  • Establish a $1 billion “Race to the Top: College Affordability and Completion” competition that would create incentives for states to reform their higher education financing models, better align entry and exit standards between secondary and postsecondary systems, and maintain adequate levels of funding for public institutions.
  • Create a new $55 million “First in the World” competition that would provide funding to postsecondary institutions and non-profit organizations to develop innovative strategies for improving productivity, including through activities designed to reduce the need for remediation and competency-based approaches to obtaining college credit.
  • Requiring colleges to collect earnings and employment information, and creating a new “College Scorecard” to help students and families evaluate postsecondary institutions.
  • Making the American Opportunity Tax Credit (AOTC) permanent. The AOTC is a partially refundable tax credit that can cover up to $10,000 of college costs over the first four years of a student’s postsecondary career. It temporarily replaced the Hope Credit under the Recovery Act, and has been extended through the 2012 tax year.

National Skills Coalition supports efforts to expand access to education and training for all Americans to ensure they have the skills necessary to get and keep well-paying jobs. We look forward to working with the Administration and Congress to advance policies that are consistent with this goal, while working to strengthen other key federal workforce and education programs.