By Justin Pope
President Barack Obama has rallied college students at dozens of campuses, touted his record on student aid and needled Republican challenger Mitt Romney for advising students to “borrow money if you have to from your parents.” Romney counters that despite the flood of federal financial aid unleashed during Obama’s term, college costs and student debt have only grown.
Here are some questions and answers about the complicated landscape of college costs and the presidential campaign.
Q. What’s happened to college costs under Obama?
A. They’ve gone up — a lot, at least at four-year schools. Since the 2008-2009 academic year in which he took office, the average public four-year college has increased its tuition list price 26 percent. That’s an increase of about $1,800, to $8,655, according to figures released Wednesday by the College Board.
Largely because of a massive increase in federal aid under Obama, the net price has gone up considerably less than the sticker price. The net price is $2,910 this year, or $570 more than the year he took office. At community colleges, aid covers on average all costs.
Q. Can either candidate do anything about the increasing prices colleges are charging?
A. Both say they’ll try. Obama has proposed a $1 billion “Race to the Top”-style contest to reward states for reforms, and said he could cut off aid to colleges that don’t take steps to improve productivity. He’s called for working with the states to cut tuition inflation in half within 10 years. A Romney campaign paper says Washington will no longer write a “blank check to universities to reward their tuition increases” and to support schools pursuing new models to drive down costs.
Q. What’s Obama’s record on student aid?
A. Obama can rightly claim he’s transformed the federal financial aid system. Partly that means more money — Washington is on track to disburse almost $50 billion more this year than in 2008-2009. Spending on Pell Grants for low-income students has nearly doubled to about $35 billion, supporting about 10 million students, up from 6 million when he took office, and he successfully pushed Congress to postpone a scheduled doubling of the interest rate on subsidized Stafford loans.
But he’s also made structural changes. Obama stopped subsidizing banks to make student loans, and now almost all student loans come directly from the government. Much of the estimated $60 billion in savings over 10 years is channeled back into other student aid programs. A new income-based repayment program caps loan repayments for 1.1 million recent borrowers at 15 percent of discretionary income and forgives their debts after 25 years. The program will soon become a 10 percent cap and forgiveness after 20 years.
Q. What would Romney do as president?
A. He’s pledged to reverse Obama’s “nationalization” of the federal student loan market and return private lenders to the process. He wants to consolidate what he calls “duplicative” student aid programs but hasn’t specified which ones.
Q. What is the problem with Pell Grant funding and what will the candidates do about it?
A. Congress has essentially laid out a schedule of Pell awards where the maximum rises to $6,030 in coming years, but hasn’t provided full funding for that commitment. There’s a shortfall averaging roughly $8 billion annually starting in 2014. Obama’s latest budget proposal calls for filling the immediate shortfall But not tightening eligibility requirements.