Obama to Target College Tuition Costs  01/27 07:12

   President Barack Obama will announce Friday a plan to shift some federal 
dollars away from colleges and universities that don't control tuition costs 
and new competitions in higher education to encourage efficiency as part of an 
effort to contain soaring college costs.

   ROMULUS, Mich. (AP) -- President Barack Obama will announce Friday a plan to 
shift some federal dollars away from colleges and universities that don't 
control tuition costs and new competitions in higher education to encourage 
efficiency as part of an effort to contain soaring college costs.

   Obama will spell out his plans at the University of Michigan in Ann Arbor. 
The speech will cap a three-day post-State of the Union trip by the president 
to promote different components of his economic agenda in politically important 
states.

   On Tuesday night during his State of the Union address, Obama put colleges 
and universities on notice to control tuition costs or face losing federal 
dollars. That's had the higher education community nervous that he could set a 
new precedent in the federal government's role in controlling the rising costs 
of college.

   The money Obama is targeting is what's known as "campus based" aid given to 
colleges to distribute in areas such as Perkins loans or in work study 
programs. Of the $142 billion in federal grants and loans distributed in the 
last school year, about $3 billion went to these programs. His plan calls for 
increasing that type of aid to $10 billion annually.

   He wants to create a "Race to the Top" competition in higher education 
similar to the one his administration used on K-12 to encourage states to 
better use higher education dollars in exchange for $1 billion in prize 
dollars. A second competition called "First in the World" would encourage 
innovation to boost productivity on campuses.

   Obama's proposal also includes the creation of new tools to allow students 
to determine which colleges and universities have the best value.

   The Obama administration already has taken a series of steps to expand the 
availability of grants and loans and to make loans easier to pay back, and 
Obama spelled out Tuesday other proposals to make college more affordable such 
as extending a tuition tax break and asking Congress to keep loan interest 
rates from doubling on July.

   His administration has also targeted career college programs --- primarily 
at for-profit institutions --- with high loan default rates among graduates 
over multiple years by taking away their ability to participate in such 
programs.

   But until now, it has done little to turn its attention to the rising cost 
of tuition at traditional colleges and universities.

   The average in-state tuition and fees at four-year public colleges last fall 
rose 8.3 percent and with room and board now exceed $17,000 a year, according 
to the College Board. Rising tuition costs have been blamed on a variety of 
factors, including a decline in state dollars, an over-reliance on federal 
student loan dollars and competition for the best facilities and professors.

   Sen. Lamar Alexander, R-Tenn., a former education secretary, said the 
autonomy of U.S. higher education is what makes it the best of the world, and 
he's questioned whether Obama can enforce any plan that shifts federal aid away 
from colleges and universities without hurting students.

   "It's hard to do without hurting students and it's not appropriate to do," 
Alexander said. "The federal government has no business doing this."


(KA)