Obama Highlights Education's Role in Reaching National Policy Goals

January 25, 2012

With the presidential election less than a year away, President Obama focused his third State of the Union address Tuesday on the struggles of the nation's middle class, urging Congress to invest in worker retraining and make college more affordable for the average American family.

In a speech that lasted just over an hour, Mr. Obama called for an expansion of job-training programs at community colleges, an extension of the tuition tax credit, and a doubling of Federal Work Study jobs. He asked Congress to prevent the interest rate on student loans from doubling, from 3.4 percent, to 6.8 percent, as it is scheduled to do this July, and urged lawmakers to pass the Dream Act, providing a path to citizenship for undocumented students.

The president also reminded lawmakers of the importance of basic research, and asked them not to gut support for academic research from the federal budget. "Don't let other countries win the race for the future," he said. "Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries."

Mr. Obama praised institutions that have taken steps to rein in tuition, such as redesigning courses and making better use of technology. But he also had some tough words for the nation's colleges, putting them "on notice" that the government would not continue to "subsidize skyrocketing tuition."

"If you can't stop tuition from going up, the funding you get from taxpayers will go down," he said. "Higher education can't be a luxury, it is an economic imperative that every family should be able to afford."

The warning comes a month after Mr. Obama met privately with a group of 10 college presidents to discuss strategies for holding down college costs and increasing productivity. Since then, many colleges have submitted to the administration their own proposed solutions.

On the jobs front, Mr. Obama called for retraining two million workers through new partnerships between businesses and community colleges. He singled out as an example an audience member, Jackie Bray, a single mother from North Carolina who enrolled at Central Piedmont Community College after she was laid off from her job as a packaging mechanic. Ms. Bray, who was a guest of Michelle Obama's at the speech, had her training paid for by the Siemens technology company, which has a partnership with the college and hired her when she completed the program.

"I hear from many business leaders who want to hire in the United States, but can't find workers with the right skills," Mr. Obama said. "You need to give more community colleges the resources they need to become community career centers, places that teach people the skills businesses are looking for now."

The policy changes that Mr. Obama laid out in his speech are generally popular, but costly. If Congress fails to prevent the interest-rate doubling, borrowers who take out the maximum $23,000 in subsidized student loans will see their interest increase by $5,200 over a 10-year repayment period, according to the U.S. Public Interest Research Group.

"Students are already weighed down by campus budget cuts, shaky family finances, and uncertain job prospects," said Rich Williams, PIRG's higher-education advocate. "In this economy, we cannot double the student-loan interest rate."

But paying for rolling back the rate increase, and other of Mr. Obama's proposals, won't be cheap. Congress has already slashed student-aid benefits to cover the growing costs of the Pell Grant program, and lawmakers would have to cut further to expand Work Study and keep interest rates low. Mr. Obama did not give any indication of which programs he would propose sacrificing.

Nor did he say which levers he would use to force colleges to rein in costs. However, a "blueprint" released by the administration in advance of the speech said the White House was proposing to "shift some federal aid away from colleges that don't keep net tuition down and provide good value."

More details of the president's college-affordability plan are expected to emerge on Friday, when Mr. Obama delivers a speech at the University of Michigan at Ann Arbor. For now, "what we don't know" about the president's affordability agenda "is greater than what we know," said Terry Hartle, Senior Vice President of Government and Public Affairs at the American Council on Education."

Whatever the president proposes, it is likely to play well with the young voters who helped carry him to victory in the last election. His remarks about tuition generated the third-highest traffic on Twitter during his speech on Tuesday night.