Obama's 2016 Budget: a Focus on College Cost, and an Uphill Climb in Congress

Jim Watson, Agence France-Presse/Getty Images

President Obama’s proposal to make community college free would cost taxpayers $60.3-billion over 10 years, according to the budget he released on Monday. Republican lawmakers vow to oppose the plan.
February 03, 2015

The key theme for higher education in President Obama's 2016 budget plan, unveiled on Monday, is affordability. Through a combination of tax breaks and subsidies, the president aims to make the cost of college less of a barrier to attending.

The budget fleshes out proposals that the president previewed in the weeks leading up to Monday’s release: It would simplify and expand the nation’s higher-education tax credits and ensure that the maximum Pell Grant award keeps pace with inflation.

And it would, as Mr. Obama first suggested last month, make community college free for millions of students. But not wealthier ones, it turns out. (More on that later.)

In a conference call with reporters on Monday, Secretary of Education Arne Duncan argued that the president’s plan would help more students graduate from college, reducing income inequality and strengthening the economy.

But in Congress, the budget will face an uphill climb, to say the least. Republican leaders have already dismissed Mr. Obama's community-college and tax-reform plans as too costly. And even before the budget was released, lawmakers from both parties forced the president to jettison his plan to raise revenue by taxing withdrawals from 529 college-savings plans.

That was one of several tax increases Mr. Obama had hoped would cover the cost of the community-college proposal. Republicans have also balked at other such increases, which would concentrate on businesses and millionaires. According to the budget, making community college free to an estimated nine million students would cost taxpayers $60.3-billion over 10 years.

A Rhetorical Shift

Over all the budget for the 2016 fiscal year, which begins in October, contains relatively few surprises for academe. Most of the new ideas were announced in advance and have already been thoroughly vetted by the news media and policy wonks.

Other proposals in the budget—such as expanding and remaking the Federal Perkins Loan Program and providing Pell bonuses to colleges that graduate large numbers of low- and moderate-income students—appeared in last year's plan and went nowhere. Likewise the president's proposal to enlarge the First in the World innovation program and make available to all borrowers the Pay as You Earn program, the federal government's most generous income-based loan-repayment plan.

The only real surprise was a proposal to count military aid in the federal share of the 90/10 rule, which requires for-profit colleges to receive at least 10 percent of their revenue from nonfederal sources to be eligible to receive federal student aid. That idea has been embraced by some Democratic lawmakers, but it too is unlikely to advance in a Republican-controlled Congress.

The budget does contain some new details on the previously announced proposals, though. One stands out: Individuals in families with adjusted gross annual incomes of $200,000 or more would not qualify for free community college.

When Mr. Obama announced the plan last month, he said it would make community college free to students who attended at least half time, maintained a 2.5 grade-point average, and made steady progress toward a degree. He made no mention of income caps.

In the call with reporters on Monday, though, an administration official said the plan always included the income cap, even if that feature hadn't been highlighted. He argued that it would have little impact on the program’s cost, since few students attending community colleges come from families whose income sits above the cutoff.

Still, it’s a rhetorical shift from the president's earlier claim that a two-year education would be free to all "responsible" students.

Streamlining Student Aid

In other areas, the budget would provide $2-billion to double the number of federally registered apprenticeships over five years, and $200-million to provide technical-training grants to community colleges. It would increase spending on TRIO, a federal program that aims to help needy and minority students prepare for college, by $20-million.

And it would simplify the Free Application for Federal Student Aid, stripping more than two dozen questions from the form, including ones related to assets and untaxed income.

Of all the proposals in the education budget, that's the one most likely to get Congressional buy-in. Sen. Lamar Alexander, Republican of Tennessee and chairman of the Senate education committee, has proposed shrinking the Fafsa to the size of a postcard, and many other lawmakers think the form is too complicated.

But even that idea will get some pushback. In this case, the opposition will come from financial-aid administrators, who have warned that oversimplification could compel states and institutions to create their own forms to assess need, ultimately complicating the process of applying for aid.

Kelly Field is a senior reporter covering federal higher-education policy. Contact her at Or follow her on Twitter @kfieldCHE.