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Local universities respond to Obama’s aid plan

The proposal would tie student federal aid to the new college rankings if approved by Congress

Government and university officials have responded with cautious optimism but some concern to President Obama’s recent student loan proposal that aims to make college more affordable and accessible to students.

The plan includes several components — including the capping of student loan costs and encouraging innovation — but centers on a college ranking system that will be tied to federal aid if the proposal receives congressional approval. In the ranking system, which should be completed by 2015 and does not need to be passed by Congress, colleges will be “ranked on access, affordability and outcomes,” according to a White House press release.

“What we want to do is rate (colleges) on who’s offering the best value so students and taxpayers get a bigger bang for their buck,” Obama said in an Aug. 22 speech at the State University of New York at Buffalo.

If Obama receives congressional approval for the plan, the rankings will be tied to federal aid starting in 2017. Students at higher-ranked schools would receive more federal aid in the form of larger Pell grants and lower-interest student loans. Currently, the federal government allots aid to schools based on the number of students enrolled, not by the graduation rate or other metrics of student success. The federal government spends $150 billion on aid annually, while state governments collectively spend $70 billion.

The U.S. Department of Education currently releases a College Scorecard, which lists statistics about schools, including net price per year, graduation rate, loan default rate and median borrowing, with the aim of educating consumers about the costs of different colleges.

“The price of college for families and individuals has increased markedly in recent decades, because the public sector has shifted funding, has shifted responsibility to private individuals because supply is relatively limited and because demand is high, under-informed and at times irrational,” said Michael Dannenberg, director of higher education and education finance policy at the Education Trust, an advocacy organization focused on academic success, particularly for low-income and underrepresented students.

The college rating system is an important step toward making college more affordable because it gives consumers easy access to facts about college costs, but it is only one stage in a series of steps the government is taking to make college more accessible and should be considered in that framework, he added.

A successful ranking system “should look at the college’s success with respect to access by low income and historically underrepresented demographics, affordability to those students and others overall and its success with those students and all students,” Dannenberg said. He added that it is too soon to evaluate the specifics of Obama’s proposal because it does not include enough information about the new ranking system.

Tying federal aid to college value can be appropriate if instituted properly, said Daniel Egan, president of the Association of Independent Colleges and Universities of Rhode Island. “The question is how do you establish the rankings to accurately gauge and compare apples to oranges and bananas?” he added.

But there is some concern that the three tenets of Obama’s plan — access, affordability and outcomes — would not receive equal emphasis in the new ratings system, Egan said. Focusing on outcomes like graduate earnings could disadvantage schools that concentrate on fields that offer lower average salaries like public service or the humanities, he added.

Colleges that are accessible to high-risk students may also have lower graduation rates, decreasing the schools’ rankings, Egan said.

A representative from Sen. Jack Reed’s, D-R.I., office said he shares the concern that students who can only afford to go to schools with lower graduation rates may be disadvantaged by the rankings.

AICU Rhode Island aims to work with Obama to make sure the rankings are fair and take into account all three of the president’s proposed goals and is already expressing concerns to congressional delegations, Egan said.

The Rhode Island Office of Higher Education supports Obama’s efforts to promote college affordability, though crafting an appropriate college ranking system that captures college value accurately will likely be difficult, wrote Michael Trainor, special assistant to the commissioner of the R.I. Board of Governors of Higher Education, in an email to The Herald. University of Rhode Island, Rhode Island College and Rhode Island Community College have instituted a tuition freeze this year in an effort to keep college affordable, he added.

Johnson and Wales University is evaluating how Obama’s proposal will affect financial aid for the school, wrote Lisa Pelosi, director of the office of communications and media relations for JWU, in an email to The Herald.

Representatives from Roger Williams University, Providence College, Bryant University, Rhode Island College and Salve Regina University could not be reached for comment on Obama’s proposal.


— With additional reporting from Katherine Lamb and Abigail Savitch-Lew

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