Obama Unveils Controversial College Aid Reform Plan

Prior to the kickoff of his bus tour to promote college affordability, President Barack Obama unveiled the details of a new higher education reform plan. In the run-up to the Thursday’s speech at the University of Buffalo arena, Obama repeatedly promised that the road map he planned to lay out was going to be “controversial,” and according to Sean McMinn of USA Today, he was not far off the mark.

McMinn outlines the three points raised by Obama that are likely to draw the most scrutiny. Obama’s proposal included calls to make school’s affordability a factor in determining whether it qualified for federal financial aid funds. Specifically, Obama asked for a list that would rank all schools in the country by metrics such as level of student debt and loan default, graduation rates, and employment prospects post-graduation. Both the feds and state governments could make use of such rankings in determining higher education funding levels for each school.

Obama wants to expand the eligibility for his Pay as you Earn program, which allows some low-income graduates to cap their student debt repayment at 10% of their discretionary monthly income. He said the program’s current structure has two problems: not enough people are eligible — and many who are eligible don’t know it.

He announced Thursday an information campaign to teach more students and graduates about Pay as you Earn, and he called on Congress to expand the option for more college graduates.
“Government shouldn’t see student loans as a way to make money, it should be a way to help students,” he said.

Colleges and the steps they can take to become more affordable to students occupied the bulk of Obama’s speech, but he did spare a portion to address his expectations of students as well – especially those who receive financial aid. Obama talked about putting in rules that would bar students from receiving government grants if they had previously failed to complete courses funded through government largesse. There are some similar safeguards already in place, but should such measures be adopted, it would be the first time that federal aid would depend directly on the progress each student is making towards graduation.

Under his plan, federal financial aid would not be disbursed in one lump sum in the beginning of a year or semester, but would instead be spread out over the term.

Much of Obama’s remarks — which kicked off the beginning of a three-campus, two-state bus tour to tout his ideas on higher education — demonstrated a more aggressive strategy on ideas he’s already outlined in previous speeches.

The president’s address Thursday came less than a month after he hinted at a plan to reform higher education at Knox College in Galesburg, Ill. He promised there to “shake up” America’s higher education system, and he touched on trends of online learning and grading based on competency, not strictly testing.