America’s College Promise – Making Higher Education More Affordable and Accessible
January 26, 2015

The rising levels of student loan debt and the nasty experiences of people struggling with their student loans keeps cropping up in the news each week. Against this backdrop, the idea of all students getting their first two years of college for free might appear fanciful. However, that is just what President Barack Obama proposed some days ago in Knoxville, Tenn.

Estimates suggest that if all the 50 states implement this proposal, it could:

  • Benefit about nine million students annually and,
  • Save a fulltime community college student an average of about $3,800 in tuition each year

According to the White House, the proposal came about by focusing on the workforce expectations for 2020. At that time, about 35 percent of jobs will require a bachelor’s degree. In addition, 30 percent of jobs will require an associate degree. Therefore, President Obama believes that boosting the accessibility and affordability of college will culminate in a higher number of qualified students emerging to cater to the demands for qualified workers in the job market.

President Obama’s Proposal on Making College More Affordable

Community colleges are public state or local institutions. They typically offer two or three-year-programs for high school graduates who do not attend four-year colleges. These colleges vary widely in quality levels, focusing mainly on narrowing the skills gap for their students. Oftentimes, they provide remedial training in basic math and reading skills for students promoted via failing K-12 schools.

In his proposal, called “America’s College Promise”, Obama stressed that students could attend the first two years of community college without paying anything as long as they were “willing to work for it.” To qualify, students would need to:

  • Attend a community college with at least a half-time status
  • Maintain a Grade Point Average (GPA) of 2.5 and,
  • Continue to make progress toward their degrees

Similarly, community colleges would need to:

  • Offer academic programs that fully transfer credits to local public four-year colleges and universities or,
  • Offer occupational training programs with high graduation rates that lead to in-demand degrees and certificates AND,
  • Adopt promising and evidence-based institutional reforms for improving student outcomes

The federal government would provide funding to cover 75 percent of the average cost of community college. Participating states would contribute the remaining funds necessary for eliminating the tuition for qualifying students. This would undoubtedly make college more accessible as well as affordable for students. In addition, it would help in curtailing the ever-increasing levels of student loan debt.

This report cites White House officials as mentioning that the proposal would cost federal taxpayers about $60 billion over 10 years, with the states providing another $20 billion. How accurate these estimates are remains debatable. This is especially so because in 2010, the White House had predicted that its income-based repayment plans would cost $1.7 billion for 2010 and $7.4 billion over the following decade. As of 2014, that estimate had touched the $7.6-billion mark for 2015 alone.

The Current Situation for Community College Students

Beckie Supiano writes that tuition and fees account for less than a quarter of the total cost of the average community college student’s attendance. The national average tuition and fees at public two-year colleges amounts to $3,347 for 2014-15. However, tuition charges vary across states, with California having the lowest average tuition of $1,429, while Vermont clocks in as the state with the highest average tuition of $7,320.

However, students need to pay for books and supplies ($1,328), transportation ($1,735), food and housing ($7,705) and other expenses ($2,210) as well. Therefore, the average price that students pay for attending a community college amounts to $16,325 for one year, prior to accounting for financial aid.

The maximum Pell Grant for 2014-15 amounts to $5,730. As a result, many of the neediest students often have to pay no tuition at community colleges – even before the president’s proposal.

In addition, the College Board counts tax breaks as a form of financial aid. Based on their calculations, the average community-college students receives sufficient non-loan aid for covering tuition and fees, in addition to the first $1,740 of living expenses. Therefore, the average student needs to pay for the remaining expenses, worth approximately $11,000.

Clearly, “America’s College Promise” might not be able to cover all these expenses. As a result, it might not even spell the end of student loans for students in the first two years of college. However, it will certainly reduce the amount that students would need to borrow.

The Potential Implications of “America’s College Promise” Becoming a Reality

While specifying that the proposal was not a “free lunch,” President Obama stated that it could be a game-changer in the field of higher education. However, if it becomes a reality, the proposal could pose serious questions to the various stakeholders in the sphere of higher education.

For example, for-profit colleges would need to reflect on why college students would want to spend $40,000 for obtaining an associate’s degree at a for-profit college, when they could easily obtain the same for free at a community college. In addition, how would community colleges handle the increased number of enrollments? There are no easy answers to these questions. The coming days will undoubtedly, throw more light on the situation.

Experts at the WSJ believe that nationalizing the program would make community colleges more expensive and bureaucratic. This action could give states an incentive for reducing their own direct funding for community colleges, under the garb of redirecting spending to student grants. With the federal government contributing three dollars for every dollar that states pay, the states could force community colleges into raising tuition for securing greater amounts of federal money.

It is worth noting that recently, the federal government formulated a “gainful employment” rule that linked federal aid to student debt and incomes. If implemented, this rule could force nearly 1,400 for-profit programs to wind up. Yet, this rule does not apply to community colleges or nonprofits – an aspect that could have a telling impact.

America’s College Promise – A Last Ditch Attempt at Shoring up the Obama Legacy?

One of President Obama’s key focus areas has been to empower the middle class by providing education and opportunity. Thus, it is worth noting that he views the declining levels of state funding in higher education as a barrier to the aspirations of the middle class. During his presidency, President Obama has taken several steps to expand federal support for college students. These include:

  • Raising the maximum Pell Grant award by nearly $1,000 to $5,730 for 2014-15
  • Establishing the American Opportunity Tax Credit in 2009 that provides families with up to $10,000 for four years of college tuition
  • Formulating the Pay-As-You Earn loans that have helped new borrowers cap loan payments at 10 percent of their incomes – a move that benefited about five million borrowers
  • Awarding $75 million to 24 colleges and universities for expanding college access and improving student learning under the new First in the World grant program
  • Proposing the development of a college ratings system by 2015 that would recognize institutions that deliver on:
    • Enrolling students from all backgrounds
    • Remaining affordable and,
    • Helping students graduate with a degree or certificate of value

However, many would view this latest proposal as an attempt to cement his legacy in the last two years of his term. Patricia McGuire highlights the potential benefits and drawbacks that this proposal could lead to, if implemented.

If approved by the Congress, the plan could help students acquire the skills and knowledge necessary for meeting the demands of a growing global economy. That too, without having to deal with excessive levels of student loan debt, before they even begin working.

The Road Ahead for the New Proposal

President Obama will discuss the cost of the plan as well as the entire proposal during his State of the Union address on Jan. 20. However, to come into effect, the $6 billion-a-year plan would need the approval of the new Republican Congress. At present, the Republican Congress and the White House don’t exactly see eye-to-eye on a host of issues – especially on big new spending programs.

However, President Obama believes that college access and affordability is an area where the Congressional Republicans can work in conjunction with the White House. It’s probably why President Obama, in his speech in Tennessee, highlighted that the state already had a similar program, signed into law by a Republican governor.

In Knoxville, Tenn., Bill Haslam, the Republican governor of the state, spoke before President Obama and Vice President Joe Biden. In his speech, Haslam mentioned that while Democrats and Republicans might hold differing points of view on approaching income equality, they could agree that community colleges play a vital role in the economic growth of the country.

To add credence to this bipartisanship, the state’s two Republican senators even traveled with the president to the event. However, that does not indicate whether the rest of the Congressional Republicans will be willing to walk alongside the president over this proposal. Whether or not that happens, will be clearer in the coming days.