Everything You Need to Know About President Obama’s Blueprint for College Affordability

President Obama at Ann Arbor

President Barack Obama delivers remarks on college affordability while speaking at the football practice field at the University of Michigan's Al Glick Field House in Ann Arbor, Mich., Jan. 27, 2012. (Official White House Photo by Pete Souza)

Cross-posted from the White House Blog.

In the State of the Union, President Obama made a point to talk about two critically important trends when it comes to education.

First, if you look at unemployment rates broken down by education level, you’ll notice something stark: Those without a college diploma are twice as likely to be without a job as those who earned a bachelor’s degree. For those who finished college or received more education still, the unemployment rate is just 4.1 percent—less than half the national average. And even among the employed, those who finished college make twice as much as those who failed to finish high school.

But even as a college degree has become more important than ever, the cost of that diploma has [begun to] skyrocketed. For the first time, Americans owe more on their student loans than they do on their credit cards. A senior in high school today has seen the cost of full-time attendance at a public university nearly double in her lifetime.

This morning at the University of Michigan in Ann Arbor, the President outlined a Blueprint for making college more affordable.


The first step is reforming student aid. The federal government provides a lot of money to college campuses through a system that’s antiquated and in real need of an update. President Obama is proposing changing that system to help colleges focus on three principles:

  1. Setting responsible tuition policy: offering relatively lower net tuition prices and/or restraining tuition growth;
  2. Providing good value to students and families: offering quality education and training that prepares graduates to obtain employment and repay their loans; and
  3. Serving low-income students: enrolling and graduating relatively higher numbers of Pell-eligible students.

Colleges that do the most to provide students with good long-term value will be rewarded with additional dollars to help students attend. Those that don’t act responsibly in setting tuition will receive less in terms of federal aid.


We’ve seen incredible results from President Obama’s Race to the Top program, which is aimed at spurring systemic reforms that improve primary schools. It’s already helped 19 states better educate 22 million students for less than one percent of total education spending.

Now the president is hoping to create a similar initiative for higher education.

The federal government would provide a $1 billion investment to entice state governments to revamp the structure of state financing for higher education, maintain adequate levels of funding for colleges and universities, and help kids graduate on time.


President Obama also wants to create a First in the World competition that would invest $55 million in individual colleges and nonprofits that are working to establish or scale up new programs that boost productivity and enhance quality on campuses. Some schools are already embracing these kinds of innovations—redesigning courses to make better use of technology, for example. But First in the World would create incentives for institutions across the country to follow their example.


Right now, if you’re a high school senior, or the parent of a high school senior, sifting through all the information that’s out there about college costs and financial aid is a nearly-impossible task. President Obama wants to give families new tools to help them make informed decisions about higher education. He’s proposing three new efforts:

  1. The President will create a College Scorecard for all degree-granting institutions to help students choose a college that offers the kind of education they hope to pursue at a price they can afford;
  2.  The Obama administration will require colleges to put together a Financial Aid Shopping Sheet to make it easier for families to compare college financial aid packages.
  3. The President is also proposing to begin collecting earnings and employment information for colleges and universities, so that students can have an even better sense of the life they’ll be able to build once they graduate.


President Obama has already more than doubled total amount of funding available for Pell Grants and is helping 600,000 veterans go back to school with the Post-9/11 GI Bill, but there are other roles that the federal government can assume when it comes to keeping college affordable.

In the State of the Union, the President called on Congress to keep interest rates low for 7.4 million young people who take advantage of student loans (If Congress doesn’t act, the interest rates for subsidized Stafford student loans will inrease from 3.4 percent to 6.8 percent on July 1) , make the American Opportunity Tax Credit permanent, and double the number of work-study jobs over the next five years to better assist college students who are working their way through school.

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  1. I have read all of the comments! Does anyone take responsibility for their own actions? It is not the President’s fault if you take out a student loan and do not read the details of paying back these loans. We as americans have got to start taking our own medicine. Stop complaining! Our children should be going to college in their won state, that is first. We as parents knew our children were going to college and now you are crying over FAFSA. Just be thankful we have some federal money to help us and our children. Pres. Obama, is trying his best to find the money to help ease some of this burden, but he is no magicain and we all want to sit back and blame him for our problems. Everyone grow up, and shut up. You knew when you applied for student loans they will one day have to be paid back! Well some of us are out in the street because we also knew about the loans on our homes, cars, etc. Now it is time to dig deep in your educated mind and pull a rabbit out of your hat. Is this not what the Republicans have told the american people. Pull yourself up by your bootstraps, oh that’s right you have no bootstraps, you just have this massive loan to repay. You keep putting the Pres. down while he is at least trying to help us. You see, you may not like the rabbit he pulled out of his hat, but at least he has rabbits to pull. The other party only has lies and more lies to tell you. These lies will only keep those who bleieve in those lies in the dark. Young people you are the master of social networking get to work and maybe just maybe someone will have an answer to your problems. Remember there is always hope and you are smarter than you know. Some of us do not have degrees and will not be able to make the potential money your degree will give you one day.

  2. My daughter has just finished her masters in LPCC in california and has about 150,000 in student loans..the state has yet to release intern #’s but her student loans are coming due at the rate of 1700/month…what can we do to help her.

  3. A goal of per credit cost not to exceed resonates.

    For example:

    Associates: Not to exceed $250/credit
    Bachelors: Not to exceed $350/credit
    Masters: Not to exceed $450/credit
    PhD: Not to exceed $600/credit

    Yes, you can exceed but Race to the Top should create a healthy marketplace.

    You do need a skills/coaching/scorecard to match students to the right college. For example, large/small, type of major, etc.

    Great effort.

  4. i am a 1998 grad with a bsba, an associates degree, 1 yr in a med program that i had to drop out due to manual dexterity required and problem with my hand .
    I worked part time while attending and raised a young teen. No car, no help and renting. Six long years of hard work, good grades and determined to make some good money. Well, I am 51 with 30,0000 loan debt that started at 20,000. All the jobs, I have had donot pay enough to obviously provide a decent quality of life and to keep this loan out of deferrment or provide enough monies to make a payment other than income contingent. Being that the payment has been income contingent and paying a bit more ever month, the balance seems to be increasing which should not be a reality. I still rent, dont own a vehicle and my son is married with two children now….has his own home, 2 vehicles is a business owner and has just purchased the commercial property, he has no other education besides a high school diploma……………..Whats going on in this country? Something seems backwards………..preach about how people need a college education to better their quality of life …………let them aquire gov loan debt that will need to be paid for the rest of their life and not provide the jobs with the appropriate income to provide. Where is the help for millions of grads in their 50 and 60 still paying this debt that have been displaced from their jobs or have jobs that the positions and offers for advancement are being replaced with twenty yr olds with no education. Over the years I have seen college tax benefits as well as income credits for children that we 50 and 60 yr olds never received. Being single, educated with low paying jobs can not get people like me ahead. Is this quality of life? Is it worth the added expense of a student loan? I believe this is what i have to look forward to for the rest of my life if government and employers dont make the right decisions to set things in motion. Is there really any help to bring down gov student loan debt besides for the few that get mommy or daddy to get them a job working in the government sector………where is the help?

  5. There is clearly a correlation between the increasing amounts students borrow and the ever increasing costs of attaining a college degree. During my adulthood, I’ve seen no real signs that universities and colleges will control spending, and there is no financial incentive for them to do so. I’ve seen lots of spending that doesn’t improve the desired outcome of an educated adult. Such spending includes money spent for more administration and overly fancy buildings.

    Universities and colleges, whether for profit or not for profit, should be required to assume some and perhaps all of the risk of default when students borrow money. If the schools have to assume risk, they are likely to be more careful about what they spend money on. This is no different than the mortgage industry where lenders underwrote bad loans because they bore no risk of loss.

    Plus, workloads of faculty and administrators need independent evaluation. If there are work areas that don’t contribute to the desired outcome of an educated adult, it’s time to cut workloads.

  6. honestly tuition is to expensive, I’m a student with a GPA 4.0 and the college I’m attending refuses to help me in any Assistance for a grant or a work study program who can I speak to?? or address a complaint about the college I’m attending? I’m about 20 credits from graduating and on partial unemployment. the system FAFSA is not geared to help students who are showing progress or individual financial difficulty cause if you are single without kids automatically the application is designed to disqualify a student for any assistance something has to be done cause I’m having financial hardship and cant even pay a part-time semester,

    • If you have a 4.0 GPA, there are literally thousands of scholarships out there that you should have and or could have applied for. Cost of college tuition aside, there are avenues out there to help make pay for the cost of tuition. Don’t blame the college, blame yourself for not doing the necessary research to help your cause.

  7. Thank you for interesting post man. But i don;t thin Obama will win the President Competition in new round.

  8. Exciting! I’m wondering how the college version of Race to The Top would deal with state schools that are actually funded more by private sources than by the state government, as is the case with my university.

    Also, I really like the idea of having access to an overview of earning & employment outcomes for universities, but I wonder whether a fast-changing job market might affect their usefulness? Or perhaps high scores would indicate that a college/uni is good at adapting to that changing market?

  9. This post contains some inaccuracies including: “(If Congress doesn’t act, the interest rates for Pell Grants will inrease from 3.4 percent to 6.8 percent on July 1)” The Pell Grant is a grant, there is no interest rate associated with it.

    Additionally, while the unemployment rate for bachelors degree or higher is 4.1 percent, that rate only looks at Americans 25 years or older, obscuring the difficulties that young & recent college graduates are having in obtaining full-time employment.

    • @arieswym – thanks for pointing out the typo on the Pell Grants. I’ve corrected it to read “subsidized Stafford student loans.”

      Cameron Brenchley
      Office of Communications and Outreach

  10. My son is a student at MIAT in Canton Michigan. His tuition is $33,000 for a 20 month program. He has no money left over because all of his pell and direct loan money goes to tuition.I live on a very fixed income and have myself my husband and 2 children living at home. If my son can not pay his rent for his apartment the school is going to kick him out of school. My son refuses to quit school and has said he will sleep in his car. He did get a grant through the school to pay his security deposit and 2 months of rent for him and the school paid Dec and Jan rent. I need to figure out how he is going to have a roof over his head for the month of February. We need to look at the price of tuition and we need to look at affordable housing and how the schools can help because what kind of an education is a student going to get if they have to sleep on the streets or in their car? There has to be something that can be done to help.

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