President Barack Obama appeared at University of Michigan Jan. 27 to announce college affordability proposals (Pete Souza/White House)

WASHINGTON—College tuition rates have increased faster than family incomes in recent years. With a new set of reforms in the works, the federal government is hoping to do something about college costs and make the American dream accessible for more Americans.

President Barack Obama released new proposals on Friday to make college more affordable, calling on the federal government, states and universities to work together to keep costs down.

If Obama’s reforms are approved by Congress, it will mark the first time in the nation’s history that the prospect of federal financial aid has been connected to keeping college tuition policies in check, said Cecilia Munoz, director of the Domestic Policy Council at the White House.

Plans on how to pay for the proposals will be unveiled in the Department of Education’s new budget in February, said Carmel Martin, the assistant secretary for planning, evaluation and policy development.

The package, which Obama announced at the University of Michigan on Friday, showcases strong support for accountability at both the state and federal levels. The reforms include offering more federal aid to colleges that maintain responsible tuition policies, developing college scorecards to aid families in the college selection process, and investing $55 million in colleges to help them improve the quality of education on their campuses.

“As President Obama has said repeatedly, I absolutely believe we have to educate our way both to a stronger economy and ultimately to a stronger country,” Secretary of Education Arne Duncan said in a teleconference with reporters, where Munoz and Martin also spoke.

“Preventing college costs from spiraling out of control is a shared responsibility,” he added.

In his State of the Union, the president spoke of the need for cost controls on campuses, including his hope that Congress will prevent interest rates on subsidized Stafford student loans from doubling, rising to almost 7 percent.

Although Obama called on Congress to help make college more affordable, he said that states and institutions need to do their part as well.

“We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money,” Obama said in the State of the Union. “States also need to do their part, by making higher education a higher priority in their budgets… So let me put colleges and universities on notice: if you can’t stop tuition from going up, the funding you get from taxpayers will go down.”

In the president’s multi-tiered system, Duncan said responsibility lies on the shoulders of many: states need to stop cutting higher education budgets, schools must make an effort to restrain tuition and still provide a quality education, and parents must consider affordability when selecting colleges for their children.

According to Joni Finney, vice president of the National Center for Public Policy and Higher Education, the Obama administration has made reasonable attempts to make college affordable by increasing the size of Pell grants. But shifting financial aid resources from institutions that fail to keep their tuition down can have unforeseen negative consequences in poorer states, Finney said.

In Finney’s view, states and universities need to step up to keep costs down because the federal government’s aid can only do so much.

“The problem though is you keep increasing grants and tuition keeps going up, you can never catch up,” she said.


From Obama’s blueprint for keeping college affordable


  • Race to the Top: College Affordability and Completion
    • Cost: $1 billion
    • Help students complete college on schedule
    • Provide incentives for states and institutions to create projects that save money for universities, so they can place less financial burden on students and families
  • Federal aid shifts
    • Shift more federal financial aid resources to colleges that practice responsible tuition policies, offer valuable educational experiences for their students and graduate higher numbers of low-income students
  • Requests to Congress
    • Keep interest rates on student loans at 3.4 percent
    • Double the number of work-study jobs available
    • Make American Opportunity Tax Credit permanent

(Information from White House Office of the Press Secretary)