Oh great, Obamacare meets college education. This should be good. The simple fact of the matter is the colleges have no incentive whatsoever to reign in their costs since the vast majority of students are financing their educations via the federal student loan program. With the Federal government acting as the lender of last resort, colleges just continue to do whatever they please. If student financing were not so readily available, the absurd prices for tuition, room and board could not be met by most students and so universities would have to react and adjust their costs to reality. Think about it, name any program that is subsidized by the government that isn't in trouble. Foods stamps, farm subsidies, student loans, mortgages, medicare, medicaid, social security it's all a very dangerous house of cards.
Obama to Offer Plans to Ease Burden of Paying for College
By MICHAEL D. SHEAR
Published: August 20, 2013
WASHINGTON — President Obama
will offer a series of proposals this week aimed at making college more
affordable by reshaping the way Americans pay for higher education, he
said in an e-mail to supporters on Tuesday.
In the message, Mr. Obama promised to take action to confront the
financial challenges facing an increasing number of students and their
families. The average tuition at four-year colleges has tripled over the
past three decades, and students who take out loans are left, on
average, with $26,000 in debt, he said.
“To create a better bargain for the middle class, we have to
fundamentally rethink about how higher education is paid for in this
country,” Mr. Obama said. “We’ve got to shake up the current system.”
The president did not reveal his proposals in the e-mail, and aides at
the White House declined to provide details before Mr. Obama embarks
this week on a two-day bus tour through upstate New York and
Pennsylvania. They said Mr. Obama would talk about his plans in a series
of speeches and town hall-style meetings at universities.
“The proposals that the president is going to lay out are not going to
be popular with everybody, but they are going to be in the best
interests of middle-class families,” said Josh Earnest, a spokesman for
Mr. Obama. “The president has some ideas about how we can better align
federal assistance with a commitment on behalf of colleges to keep costs
low for students.”
Aides pointed to proposals that Mr. Obama made about college affordability in his 2012 State of the Union address.
In that speech and in others since then, Mr. Obama has called for
legislation to shift aid away from colleges that fail to keep costs down
and to provide an online “scorecard” with information for college
students and their parents about the real costs of education.
But Mr. Earnest said that “proposals beyond what the president rolled
out” in the State of the Union address would be unveiled during his road
trip this week.
“The president believes that what we need to do is we need to
fundamentally rethink and reshape the higher education system and we
need to find a way to build on innovation,” he said.
Those comments puzzled some experts on higher education. Several said
they were hard-pressed to think of fundamental ways that the president
could reshape the college financial aid system without the cooperation
of Congress, which has been fleeting during his tenure. Student loan rates have been a particular source of political friction.
“It seems very unlikely that he’s going to be able to do anything to
change the underlying fundamentals that are driving the costs of
college,” said Judy Scott-Clayton, a professor of economics and
education at Teachers College at Columbia University. “I’m very curious
to see what they will do.”
Sandy Baum, an economist at the George Washington University Graduate
School of Education and Human Development, said Mr. Obama’s influence
was limited unless he won cooperation from lawmakers.
“When you think about what the federal government can do, much of that
would involve Congress,” she said. “That’s problematic at this point.”
Both economists said the statistics in Mr. Obama’s e-mail were somewhat
misleading. For most students, the overall price of going to college has
increased much more slowly when financial aid is taken into account,
they said. And increases in tuition are often driven more by financial
problems affecting states than by a lack of cost controls at
universities, they added.
“The average student, including those who get nothing, are getting
$5,000 to $6,000 in aid,” Dr. Scott-Clayton said. “That’s getting close
to covering tuition.”
Mr. Earnest’s mention of incentives may hint that Mr. Obama will expand
on his idea to provide more aid for students to attend colleges that
hold down tuition. But the economists said it was not clear how that
would work.
A small amount of government money that the administration could
identify without Congressional approval would be unlikely to change
college policies, they said. And if large amounts of federal student aid
were held back from high-cost colleges, students at those colleges
could feel penalized.
“If it’s a small amount, how likely is it to affect anything?” Dr.
Scott-Clayton said. “If it’s a big amount, then we worry that students
will be punished for something that the schools control.”
