President Obama Maintains Higher Education Course in His State of the Union Address

On January 28, 2014, President Obama gave his annual State of the Union Address. Although that speech outlined no new higher education initiatives, its limited attention to higher education signaled that the Administration was maintaining the course it had set forth last summer. Then, as now, the President explicitly addressed the issue of college affordability.

He declared:

We’re shaking up our system of higher education to give parents more information, and colleges more incentives to offer better value, so that no middle-class kid is priced out of a college education. We’re offering millions the opportunity to cap their monthly student loan payments to ten percent of their income, and I want to work with Congress to see how we can help even more Americans who feel trapped by student loan debt.

The President’s conceptual approach to higher education reform contains components:

  • A new ratings system to evaluate college performance. The ratings system would include such measures as how many students graduate on a timely basis, how well graduates do in the workforce, the average debt burden for graduates, among others. Financial aid would eventually be tied to those ratings.
  • Efforts to encourage “new competition” between colleges to promote innovation in improving affordability and student success. He pointed to the Southern New Hampshire University’s granting course credit based on how well students learn, not classroom hours, and Central Missouri University’s early college program where high school students can earn college credits as some examples of innovation.
  • Mechanisms to assure that students who borrowed to finance their college education would be able to “manage and afford” their debt service. Toward that end, he planned to expand student eligibility for the “Pay-As-You-Earn” program, which caps annual student debt service at 10% of a graduate’s earnings.

Later this year, one will likely see additional announcements on the higher education front, especially as the Higher Education Act comes up for renewal.





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