Obama seeks to control college costs

To address the soaring cost of higher education, President Obama pledged Thursday to develop a college rating system that would tie federal financial aid to performance in areas such as tuition, graduation rates, percentage of low-income students, and debt load of graduates.

Students attending better-performing colleges would receive larger federal Pell grants and more affordable student loans - a proposal that would require congressional approval. The nation awards more than $150 billion annually in student financial aid.

"Not enough colleges have been working to figure out how do we control costs," Obama said Thursday morning at the University at Buffalo, the first stop on a two-day bus tour in New York state and Pennsylvania.

The president promised forums around the country to gather input on potential areas of ratings, such as graduate earnings. Under the proposal, criteria will be developed by 2015 but financial aid would not be tied to the results until 2018.

The president also will encourage states to stop cutting higher education funding, to tie funding to performance, and to push for less costly options, including online programs and three-year accelerated degrees.

Pennsylvania had already signaled possible movement in that direction. Gov. Corbett's commission on higher education in November proposed "performance scorecards" for colleges that would take into account measures such as controlling tuition costs and opening access to low-income students with results tied to future funding increases.

Obama also laid out proposals to deal with mounting student debt. According to the White House, students graduate with debt on average of $26,000.

Under the proposal, the administration would require colleges with high dropout rates to distribute student aid over a semester rather than in one lump sum at the beginning. That way, if a student drops out, the aid would cease.

Also, repayment of loans for all students would be capped at 10 percent of a graduate's monthly income. Currently only some students have that option.

In a nearly 40-minute speech, Obama criticized the rising price tag of a four-year college education, which has grown by 250 percent over the last 30 years, compared with the income of a typical family by only 16 percent.

"That's a big gap," the president said.

College officials in the region and across the nation were cautiously optimistic about the president's ideas, realizing that rising cost is a problem that needs to be addressed. But they said the quality of the rating system will be key.

States that have tried such systems have had mixed results, said Laura Perna, a professor specializing in higher education at the University of Pennsylvania.

"It's really hard to do, given the diversity of institutions and the diversity of students," she said.

Daniel H. Weiss, president of Haverford College, said evaluating all colleges based on how quickly they graduate students - such as through accelerated programs - is not necessarily fair. Online classes, for example, do not provide the same opportunity as a campus experience, he said.

"Any educational program that seeks to develop the character and value and wisdom in students - not just technical skills - calls for some time in seat," he said.

"We produce the best educational opportunities in the world," he said of the nation's higher education system, "but they are not cheap."

Tuition, fees, and room and board at Haverford - a highly selective liberal arts college on the Main Line - topped $59,000 this year.

At Rutgers University and Pennsylvania State University - the flagship state schools in New Jersey and Pennsylvania - officials said they would wait to examine the details of Obama's proposal.

"On the surface, it looks like many of the areas that the president has identified as a focus are already areas where Penn State has been for years working hard to advance and has made significant progress," spokeswoman Lisa Powers said, citing graduation rates and enrollment of low-income students.

Temple University president Neil D. Theobald said that as long as schools would be rated against their peers, he likes the concept.

"I'm certainly quite happy the president is taking what is a conversation within higher education and making it a national issue," he said.

Stephen Spinelli Jr., president of Philadelphia University, was not quite as enthusiastic.

"I don't see anything startling here," he said, noting that the university has improved its curriculum and added scholarships to help needy students. "The bully pulpit of the president will bring some focus and energy to creating the solutions, but frankly, I feel focused and energized and urgent."

Philadelphia city officials welcomed the plan.

"As we try here in Philadelphia to double the number of citizens with a college degree so we can be more economically competitive, we cannot bear to continue on the current trajectory of college costs rising faster than family incomes and grant aid," said Lori Shorr, Mayor Nutter's chief education officer.