Obama Administration Lays Out Aggressive Postsecondary Education Agenda

In mid-August President Obama began a short bus tour beginning in New York to talk about college affordability and his plans for addressing access and affordability across the country.

The plan would highlight policy changes in three major areas:

  • Pay for Performance by tying financial aid to college performance, starting with publishing new college ratings before the 2015 year; challenging states to fund public colleges based on performance; and holding students and institutions receiving student aid responsible for making progress toward a degree.
  • Promoting Innovation and Competition to challenge colleges to offer students a greater range of affordable, high-quality options than they do today; give consumers clear, transparent information on college performance to help them make the decisions that work best for them; and encourage innovation by stripping away unnecessary regulations.
  • Ensuring that Student Debt Remains Affordable to help ensure borrowers can afford their federal student loan debt by allowing all borrowers to cap their payments at 10 percent of their monthly income; and reach out to struggling borrowers to ensure they are aware of the flexible options available to help them to repay their debt.

The first major step in implementing this plan will be issuance of new college ratings by 2015. The U.S. Department of Education will develop a new ratings system, to be displayed on institution’s federal scorecards, to help students compare the value offered by colleges and encourage colleges to improve. The ratings will be developed through public hearings around the country to gather input and will be based on such measures as:

  • Access, such as percentage of students receiving Pell Grants;
  • Affordability, such as average tuition, scholarships, and loan debt; and
  • Outcomes, such as graduation and transfer rates, graduate earnings, and advanced degrees of college graduates.

Between 2014 and 2018 the Department will refine these measures and seek legislation using this new rating system to transform the way federal aid is awarded to institutions once the ratings are developed. The goal will be to tie federal student aid funding to institutions to the rankings by 2018.

In addition the plan identifies a number of other policy proposals to work towards greater access and affordability for students. Among these proposals is a Race to the Top for Higher Education to spur state higher education reforms and reshape the federal-state partnership by ensuring that states maintain funding for public higher education. The promotion of innovation and competition by awarding credits based on learning and not seat time, using technology to redesign courses and for student services, and recognize prior learning and promote dual enrollment. Finally efforts will include proposals to ensure student debt is affordable by making borrowers eligible for the Pay as You Earn program.

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