Obama’s college tuition plan good for GN

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For more than 20 years, I have had it in mind to write a story, “Blind Acceptance,” about ever-increasing college tuitions that seem to rise without any correlation to the cost of delivering education, and the inexplicable lack of any push-back from middle class families who have suffered the most.

College costs have risen by three times the rate of inflation, and even greater (if you can believe it) than the cost of health care. Yet most colleges are “nonprofit,” many have occupied their spaces for 100 years, they get endowments and contributions and government aid. And still the cost rises to the point of forcing middle-class families to take out second and third mortgages, while students loan debt now eclipses even credit-card debt.

And yet, for 20 years, you heard not a peep from the middle class, even as its economic power has become completely eroded. You hear plenty of complaints about the tax burden of financing public education, complaints about why it costs some $12,000 a year per pupil, but nothing about why it costs $40,000 a year (not including dormitory) to spend 30 weeks of the year in college (after factoring vacation breaks).

Investment companies would put the fear of ruin into parents, from the time they first learn they are having a child, about how crucial it is to stash away money in a college savings account, because the cost of tuition will rise ever and ever higher. Remember that commercial about the daughter who learns that she has gotten a perfect SAT score, and all the father can think is that he is ruined?

And not a peep.

No one questions why University of Michigan charges Great Neck students as much as Yale, or why the University of Wisconsin charges as much as University of Michigan. And you really can’t have University of Wisconsin charging more than Harvard, even though Harvard has an endowment greater than the gross national products of many countries.

And middle-tier schools without such popular football teams or the prestige, can’t charge less than the University of Michigan, either, because that would suggest they are not as desirable.

But when I would pose the question to college recruiters during fairs when our sons were “shopping” schools as to why college tuitions were so outrageously high and rising every year, the answer they gave was: “Because we can.”

For eight years, I attended the annual College Financial Aid workshop offered by Great Neck North High School, and each year, I became depressed hearing the warning: The only thing worse than telling your child they cannot go to a high-priced private college, is telling your child they cannot return.

Does that mean that I shouldn’t have allowed our son to apply to Yale early decision because I couldn’t afford it? If David, North High’s valedictorian, Intel winner, etc etc. didn’t deserve a Yale degree, who did? I can’t tell you how long I suffered over this conundrum.

But while parents all over the country grieve over how they will come up with the bucks to send their kids to college, no one actually questioned why tuitions were so high and getting higher. I suspect the reason there has been this “blind acceptance” is that families are just so thrilled to have their children accepted to the school of their dreams, they do not challenge or question. They just do what they have to do to make their child’s dream come true.

A community like ours is particularly harmed by this trend in ever-rising college tuitions. We send 98 percent of our students off to colleges, but are penalized in getting aid, even for eligibility for work-study programs, because of our area’s high-cost of living, astronomically expensive homes and property tax rates. Most private colleges do not factor in regional differences in housing costs. If anything, the most prestigious private colleges expected middle-class families to use their high-priced homes as an ATM and take out second mortgages to pay for tuition. For most of us, college tuition for our children is the single biggest expense after our homes, we will ever have.

But the Great Recession seems to have pushed the middle class to its limit. Many middle class families which have seen their real income eroded over the past decade, no longer have the luxury to “suck it up.” Families are having to pull their children out of colleges or restrict their children’s applications only to state schools.

Now, for the first time in history, President Barack Obama is taking on college tuition, proposing to link federal grants to colleges to their tuition affordability and graduation rates.

“We can’t just keep on subsidizing skyrocketing tuition,” he said in the State of the Union and repeated in a speech delivered at the University of Michigan.  “If tuition is going up faster than inflation, faster than even health care is going up, no matter how much we subsidize it, sooner or later, we’re going to run out of money. And that means that others have to do their part. Colleges and universities need to do their part to keep costs down as well….  

“I’m telling Congress we should steer federal campus-based aid to those colleges that keep tuition affordable, provide good value, serve their students well. 

“We are putting colleges on notice….you can’t assume that you’ll just jack up tuition every single year.  If you can’t stop tuition from going up, then the funding you get from taxpayers each year will go down.  We should push colleges to do better.  We should hold them accountable if they don’t.” 

Obama has already initiated several significant proposals to improve access and affordability to higher education.

Early in his administration, Obama dramatically expanded access to Pell Grants by eliminating the for-profit banks as middle-men, saving taxpayers $40 billion in subsidizing banks which was shifted directly to students instead in the form of more grants and lower interest rates on student loans. Under Obama the maximum Pell Grant award is being raised to $5,635 next year – a $905 increase since 2008.

“That was the biggest investment in higher education since the GI Bill,” Education Secretary Arne Duncan told reporters during a press briefing. “A $40 billion increase in Pell grants, without going back to taxpayers, just by stopping subsidizing banks, and giving it to students instead. That’s a 50 percent increase in number of people having access to Pell Grants.”

The Obama Administration’s “pay-as-you-earn” plan, introduced months ago, will enable 1.6 million students to take advantage of a new option to cap student loan repayments at 10 percent of monthly income as soon as this year. (To learn more, visit http://studentaid.ed.gov/ibr.)

Now Obama is calling upon Congress to stop the doubling in the interest rate on student loans, from 3.4 percent to 6.8 percent, which will happen in July.

He is also calling upon Congress to double the number of work-study jobs in the next five years.

He also wants to make permanent the tuition tax credit of $2,500 per year for four years.

Under Obama’s plan, the amount of federal funding colleges receive will be based on: Setting responsible tuition policy, offering relatively lower net tuition prices and/or restraining tuition growth; Providing good value to students and families, offering quality education and training that prepares graduates to obtain employment and repay their loans; and Serving low-income students, enrolling and graduating relatively higher numbers of Pell-eligible students. (A lot of the specifics still are being worked out).

Obama also called upon states to “do their part.” Last year 40 states cut higher education funding, the largest factor in tuition increases at public colleges over the past decade.

To address this, Obama is launching a Race-to-the-Top-style competition for college affordability, making $1 billion available in incentives for colleges to come up with programs that increase affordability and improve completion rates.

“We’re telling the states, if you can find new ways to bring down the cost of college and make it easier for more students to graduate, we’ll help you do it,” he said.  “We will give you additional federal support if you are doing a good job of making sure that all of you aren’t loaded up with debt when you graduate from college.”

Much of the anxiety over the affordability of college, and the suitability of choosing one college over another, will also be relieved through a series of new programs:

Through the new Consumer Finance Protection Board, colleges will produce a “Know Before You Owe,” so you know the total cost of college.

The administration will create a college scorecard for all degree-granting institutions making it easier for students and families to choose a college that is best suited to their needs, priced affordably, and consistent with their career and educational goals.

Colleges will also be required to produce a “Financial Aid Shopping Sheet” (announced in October), a to make it easier for families to compare college financial aid packages.

The President is also proposing to begin collecting earnings and employment information for colleges, so that students can have an even better sense of the post post-graduation outcomes they can expect, and have a better measure of the value of an investment in one college over another.

“We want you to know how well a car stacks up before you buy it.  You should know how well a college stacks up,” President Obama said in Michigan. (We need such a thing for doctors and hospitals, as well, but that’s another story.)

A few schools over the past few years have responded to the crisis in college funding.

Vanderbilt University, which in recent years has become a favorite for Long Islanders, adopted a similar program to one that Yale and Harvard had introduced, of turning student loans into grants, along an income-based formula, so that students graduate debt free.

“Universities are the greatest institutions America has,” Vanderbilt University Chancellor Nicholas Zeppos told parents in announcing the program. “They provide a path of progress, learning, democracy, and most important a path toward for American Dream. When students make a choice about college, it shouldn’t be based on how much of a debt burden it will impose and how much the house can be mortgaged for. And when they leave, they should be able to choose what they really love to do, but if child accumulates a lot of debt, they may make career choices based on debt. That doesn’t serve our nation or our world. We need to unleash passion and that means enabling our graduates to leave Vanderbilt without debt.”

But Zeppos noted that tuition only covers 60 percent of the cost of education; the other 40 percent comes from “benefactors.” “The federal government plays a role in education,” he said

He complained that the cost of delivering a college education is pushed up because of unfunded mandates (that sounds so familiar).

“There is more regulation to house a mouse [in a lab], than a child [in a dorm],” he said. “A coal mine has fewer restrictions [than a research facility].”

Obama did not raise this issue of mandated costs as a contributor to rising tuitions, though I imagine in the push-back, this will be an issue, especially when it comes to actually determining the formula for awarding federal monies to campuses.

Still, “If these proposals pass, it will be the first time in history the federal government tied aid to tuition policies,” Cecelia Munoz, Obama’s newly appointed White House domestic policy council director, told reporters in a press briefing on the new initiatives.

A keystone of Obama’s “Blueprint for an Economy Built to Last,” and a recommitment to American values that reward effort and talent, “this is a comprehensive approach to tackle rising college costs. In a competitive economy, we can’t afford for college to be a privilege, and an unattainable privilege.. It has to be available to everyone,” she said.

Once a leader in the world in the number of 25- to 34-year-olds with college degrees, the United States now ranks 12th among 36 developed nations, the New York Times reported in July 2010. (http://www.nytimes.com/2010/07/23/education/23college.html)

“The growing education deficit is no less a threat to our nation’s long-term well-being than the current fiscal crisis,” College Board President Gaston Caperton warned a Capitol Hill meeting of education leaders and policy makers in 2009. “To improve our college completion rates, we must think ‘P-16′ and improve education from preschool through higher education.”

At the same time as Caperton issued his warning, the Obama Administration launched a Graduation Initiative, setting a goal of reclaiming the top spot in college graduation rates by 2020.

Much of the American graduation initiative focuses on making community colleges more vibrant and relevant to the career environment of the 21st century.

“Not since the passage of the original GI Bill and the work of President Truman’s Commission on Higher Education, which helped to double the number of community colleges and increase by seven-fold enrollment in those colleges, have we taken such a historic step on behalf of community colleges in America,” President Obama said in a speech at Macomb Community College in Warren, Michigan in July 2009.  “And let me be clear:  We pay for this plan – this isn’t adding to the deficit; we’re paying for this plan – by ending the wasteful subsidies we currently provide to banks and private lenders for student loans.  That will save tens of billions of dollars over the next 10 years. Instead of lining the pockets of special interests, it’s time this money went towards the interests of higher education in America. That’s what my administration is committed to doing.”

During the 2012 State of the Union, Obama announced another program involving forging partnerships between private businesses and community colleges to develop specific programs for the specialized skills they need from workers.

I am willing to bet though that if a Republican comes into the Oval Office in 2013, all of these initiatives designed to make college affordable and accessible will be wiped away in the first few minutes after repealing the Affordable Care Act (Obamacare) and Dodd-Frank financial regulation.

Republicans do not want to equalize the playing field for access to college, even though those with college degrees earn millions of dollars more in their lifetime and are much, much less likely to experience long-term unemployment.

That was clear in their push-back against affirmative action under George W. Bush’s reign. They don’t want a meritocracy. They prefer the good ol’ days of legacy admissions that got George W. Bush into Yale.

They like a middle class that is so strapped for money, they are stripped of political power because they really can’t afford making contributions to political campaigns. They like middle class families experiencing that permanent anxiety that comes from the moment their child comes into the world, and the nagging question, “How am I going to afford college?”

Their answer, as it has been to access to health care, is “let the free market take care of itself.”

Obama sees college as the single most significant ticket to upward mobility and the key to restoring the American Dream, as he told the University of Michigan students:

“The degree you earn from Michigan will be the best tool you have to achieve that basic American promise – the idea that if you work hard, if you are applying yourself, if you are doing the right thing, you can do well enough to raise a family and own a home and send your own kids to college, put away a little for retirement, create products or services – be part of something that is adding value to this country and maybe changing the world.  That’s what you’re striving for.  That’s what the American Dream is all about.    

“And how we keep that promise alive is the defining issue of our time.  I don’t want to be in a country where we only are looking at success for a small group of people. We want a country where everybody has a chance. Where everybody has a chance.  We don’t want to become a country where a shrinking number of Americans do really well while a growing number barely get by.  That’s not the future we want.  Not the future I want for you, it’s not the future I want for my daughters. 

I want this to be a big, bold, generous country where everybody gets a fair shot, everybody is doing their fair share, everybody is playing by the same set of rules.  That’s the America I know.  That’s the American I want to keep.  That’s the future within our reach.”

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