College Officials Welcome Obama's Focus on Higher-Education Costs, but Raise Some Concerns

Jewel Samad, AFP, Getty Images

In remarks at the U. of Michigan at Ann Arbor on Friday, President Obama spoke of pushing colleges to do more to hold down costs, and rewarding those that succeed.
January 30, 2012

President Obama chose a spiffy new indoor football field at the University of Michigan here on Friday to kick off a broad campaign for college affordability, calling higher education "an economic imperative that every family in America should be able to afford."

Blending the personal with the political—and playfully responding to shouts of support from the audience—Mr. Obama made clear that the college-cost themes in this 35-minute speech would set the tone for a continuing national discussion that will be central not only in his administration's coming budget fight with Congress but also as he campaigns around the country for re-election.

With a message that prompted cheers and praise here—but already criticism from other college and political leaders around the country, including one president who called it "political theater at its worst"—Mr. Obama challenged states to spend more on higher education, describing cuts by Michigan and 39 other states as "the largest factor in tuition increases over at public colleges over the past decade."

He urged students to pressure Congress to keep the interest rate on federal student loans from doubling in July. "That would not be good for you," he noted with exaggerated directness, drawing laughs and applause from the crowd of more than 3,000, most of whom had camped out for hours in the cold a day earlier to get tickets.

And he warned that colleges themselves needed to do more to cut costs and not assume they can "just jack up tuition every single year." Government "can't just keep on subsidizing skyrocketing tuition," he said.

"We should push colleges to do better," said Mr. Obama, as he briefly touched on forthcoming proposals to overhaul how billions of dollars in federal aid to colleges and students are awarded. "We should hold them accountable if they don't."

The secretary of education, Arne Duncan, who accompanied the president here and spent time with reporters and local television stations before the speech, said the public sees higher education as unaffordable, and "that's simply unacceptable."

That anxiety was clearly reflected in the crowd that made its way through the dark and slushy streets to hear what the president had to say on Friday. "I have a daughter coming here next fall, and I want to know how we're going to afford it," said Annie Hiltner, an Ann Arbor resident waiting as the line of students and other locals filed past metal detectors.

Inside, as rock music from Bruce Springsteen and U2 played through the speakers, interrupted now and then by live blasts of the Fight Song by the Michigan pep band, Danielle Wiliams, a sophomore from nearby Eastern Michigan University, said college costs and student-loan debt loomed large for her and most of her friends. A reporter for the student paper at Eastern Michigan, Ms. Williams said many of her classmates aren't Obama supporters but they appreciate his push to keep higher education affordable. "It's too important to worry about political divisions because it's our future," she said.

Beth Dobias, an Ann Arbor resident who lives here "because it's cool" and who works at the university, said she was glad to hear Mr. Obama talk about creating more opportunities for people who need retraining. "My uncle's in that boat right now," she said. He was an engineer at Chrysler but is now learning welding.

In the budget President Obama will release next month, the administration will ask Congress to change the criteria under which funds from three federal aid programs, known as "campus-based aid," are awarded. (The government has more say over the allocation of money to those programs, which are used primarily by public and nonprofit colleges, than it does for larger student-aid programs such as Pell Grants and the primary student-loan program.)

Details on the new formula are still being refined, but a document released by the White House on Friday said it would reward institutions that admitted and graduated a relatively higher proportion of low-income students, demonstrate that their students complete college and find employment, and set "responsible tuition" policies.

"It's not just about access, it's about completion," said Mr. Duncan, emphasizing the formula would recognize affordability and "net tuition" when calculating aid awards to colleges. "If they are providing great financial aid and they serve more Pell students," that's good, he said.

Mixed Reactions

Mary Sue Coleman, the university's president, said the plan showed that the administration understands "the complexity" of issues, including the role of states and the need for universities to curtail costs. "I'm so happy that he's brought this to a national conversation," said Ms. Coleman. She watched the speech alongside students from her campus and several nearby institutions, standing behind Mr. Obama beneath a banner with the slogan he introduced during his State of the Union speech, "An America Built to Last."

Her enthusiasm was not universally held.

While many higher-education leaders said they were grateful for the president's attention, they were wary of many specifics: The American Council on Education's Molly Corbett Broad raised the concern that proposed changes in the aid formula would "move decision making in higher education from college campuses to Washington, D.C."

The American Association of Community Colleges said a change in the formula would be welcome but worried about the "extraordinary difficulty" of developing measures of student outcomes in a way that was fair to community colleges.

The National Association of Independent Colleges and Universities, the largest private-college group, said the answer to the affordability problem "is not going to come from more federal controls on colleges or states." The association's president, David L. Warren, also criticized the idea of "telling families to judge the value of an education by the amount young graduates earn in the first few years after they graduate," one of the same arguments raised by the for-profit-college industry over a controversial new regulation introduced last year, the gainful-employment rule.

Sterner attacks came from some university presidents, including the University of Washington's Michael K. Young, who invoked Jeremy Bentham's famous "nonsense on stilts" invective in decrying the ideas as political theater, according to the Associated Press.

Peter McPherson, president of the Association of Public and Land-Grant Universities, however, said the ideas deserve a try, assuming the right metrics could be designed and states do their part. "It's important to focus on value and quality," he said. He'd like to see Mr. Obama’s ideas tested with new federal investment in the campus-based programs. "We think it's time to move to access plus completion" he said.

Along with changes in the formula for distributing campus-based aid, the administration will ask Congress to authorize a big increase in Perkins Loans, to $8-billion from the current level of $1-billion—money that would eventually be repaid to the federal treasury.

Secretary Duncan said the administration also recognizes that state budgets are squeezed but that states have a responsibility to commit more money to higher education, too. "Budgets are not just numbers," he said. "Budgets reflect our values."

To encourage states to develop systemic programs to improve affordability and higher rates of college completion, the administration is also proposing a new $1-billion higher-education competition, modeled after the Race to the Top competition it offered to states for public-school reforms.

On a much smaller scale, the administration will propose a separate $55-million competition for public and private colleges and nonprofit organizations for new strategies that get more students to attend college and improve teaching and learning. Mr. Duncan said Mr. Obama has seen "some amazing leadership" on cost containment from the presidents he met with recently at the White House, and others, including here at Michigan. "We want to make that the norm rather than the exception."

Cost cutting is nothing new to officials here. Michigan now ranks 39th in state support for higher education, down from 10th a decade ago. At this institution, a fact sheet the university provided to reporters at the speech said state support fell from $359-million to $268-million, with state money now covering only about 17 percent of the general budget. The university has also been cutting millions from its budget with energy savings and new approaches to health insurance.

Yet even as this campus represents the challenges of promoting access in the face of state cuts, Ms. Coleman said those actions were no substitute for public investment. "Can we cut ourselves to excellence? No," she said, minutes after Mr. Obama had departed. But she said she thinks Mr. Obama understands that. "He's being nuanced. He understands it's not one size fits all."

Like many big research universities, Michigan continues to add programs and facilities that add to costs—like the newly opened Flume Room in the handsomely renovated eco-friendly Dana Hall, where scientists can model the water flows of the Huron River, and at the law school, where students want international experiences. That's "not fluff," said the dean, Evan H. Caminker, reflecting on the cost conundrum as he grabbed a snack at the Michigan Union cafe on Friday afternoon. "That's not a climbing wall."

(University officials were quick to note that the three-year-old, $26-million Al Glick Fieldhouse, where Mr. Obama spoke on Friday—part of what allows the university to claim "more indoor practice space than any college or professional football team in the world"—was financed with funds from athletics budgets, as are the facility's operating costs.)

The dean, speaking from the same building where John F. Kennedy proposed the creation of the Peace Corps, in October 1960, said he believed Mr. Obama's decision to make a major speech here about college costs could be a significant milestone, even if the partisanship and gridlock in Washington keep the ideas from getting through Congress.

Presidents, he noted, can have a great capacity to shape public opinion, as Mr. Obama did with the auto-industry bailout. "He went out there and sold an idea," said Mr. Caminker.