The president is using the federal government’s increased control over student loans to push for greater federal control over college admissions, graduation rates and tuition costs.
President Barack Obama is expected to tout the increased federal role, which is to include a federal rating system of colleges, during his two-day tour of colleges and schools in Pennsylvania and New York.
The tour will resuscitate some themes he announced in 2011 and 2012, and it is likely to get much favorable publicity from established media outlets. It may boost his outreach to the increasingly worried and debt-laden middle-class voters, including young voters, whose support for Obama has dropped sharply since 2008 and last November.
The tour is part of Obama’s “Foundation for the Middle Class” series of poll-boosting speeches.
GOP leaders are already deriding the tour. “More campaigning isn’t going to change the fact that the Obama presidency and Democratic policies have made life harder for young Americans,” said Reince Priebus, chairman of the Republican National Committee said in a Wednesday statement.
“You can be sure that the president will really take every single opportunity he can to do what he does best, which is talk and talk and talk, just like he’s done for the last 4 1/2 years,” Priebus said.
Since 2008, college costs have grown by 27 percent, while more young people are staying in college because they can’t get decent jobs. Costs grew by 31 percent from 2003 to 2008. Roughly 42 percent of enrolled students don’t get degrees within six years.
Moreover, graduates’ ability to pay their average debt of $26,000 — and cumulatively, more than $1 trillion — is also curbed by Obama’s economy. For example, college graduates now comprise 19 percent of hourly workers, up from 13 percent in 2002, according to a March report in The Wall Street Journal.
Much of the package proposed by the president is designed to pressure colleges to help low-performing students minimize debt as they get through college.
“To encourage colleges to enroll and graduate low- and moderate-income students, the President will propose legislation to give colleges a bonus based upon the number of Pell students they graduate,” says the White House statement.
The statement says Obama is committed to preserving the quality of education, even as he pressures colleges to help lower-performing students. “The federal government can act as a catalyst for innovation, spurring innovation in a way that drives down costs while preserving quality,” says the statement.
But Obama’s proposed system by 2018 will grade public and private colleges for enrolling “disadvantaged” students, and for graduating students faster at reduced costs.
Once the rating system is established, Obama will ask Congress to a law that would tie government aid to college ratings, a White House official said Aug. 22.
Any rating system will be subject to much lobbying, ensuring the political and financial factors will intrude even more in academic measurements, and also giving the federal government another stick to get cooperation from university executives and academics.
The politics was highlighted Thursday morning when a White House official was asked how the government would respond if colleges tried to improve their ratings by admitting the best students they can find. “We will be very mindful of that when we build the rating system,” and will include some measure to endure that colleges “provide access” to lower-performing students, said Cecilia Munoz, director of the domestic policy council.
“There will certainly be criticism” about the rating system, said Munoz. “I don’t think the president is particularly afraid of criticism,” she added.
Obama is also also expected to to ask Congress to reduce the cost of government loans, not private-sector loans, for all students. The current “pay as you earn” plans allows some graduates to cap repayments at 10 percent of income. But Obama will ask Congress to expand it to everyone, James Kvaal, deputy director of the domestic policy council, said Thursday.
“The President is committed to ensuring that all borrowers who need it can have access to the Pay As You Earn plan that caps loan payments at 10 percent of income and is directing the Department of Education to ramp up its efforts to reach out to students struggling with their loans to make sure they know and understand all their repayment options,” said a June 22 statement from the White House.
Many free-market advocates say costs have grown partly because government aid has increased. The extra aid money, such as Pell grants, allow colleges to charge more to students, who are competing against each other to amass skills and credentials that can help them navigate a damaged economy.
Obama has championed this cheap-credit policy, and successfully pushed Congress to boost annual spending on Pell grants from $19 billion in 2009 to $36 billion in 2013.
The White House’s control over the student-loan sector has grown since 2010, when the Obamacare law allowed much-increased direct lending by government. Government loans tend to have lower interest rates, and easier repayment options than private loans, ensuring that more students and graduates are dependent on government favors.
In 2011 and 2012, Obama used that dependency to boost his support among students and graduates to vote him back into power.