Patt Morrison for February 3, 2012

Use it or lose it: President Obama threatens to reduce aid to colleges that don’t pass it on to students

Teachers and students from California de

MARK RALSTON/AFP/Getty Images

Teachers and students from California demonstrate at a ``state of emergency'' rally to protest potential statewide cuts of up to $4 billion in education spending, in Los Angeles, California on May 13, 2011.

Find a way to stop tuition from going up, or risk losing federal aid money. That was President Obama’s message last week when he “put colleges and universities on notice” during a speech at The University of Michigan. He went on to propose tying federal campus-based aid programs to tuition policies for the first time in history.

If passed, the Obama Administration would shift financial aid away from institutions that fail to stave off tuition hikes and toward colleges that make an effort to keep tuition affordable. The Administration plans to do this by increasing funding to work-study programs, Perkins loans and supplemental grants for low-income students from $3 to $10 billion in federal grants and loans annually. Tuition at the University of California has nearly doubled over the last several years, and this year the system will collect more money from student tuition than from state revenues.

WEIGH IN:

What does the president’s proposal mean for California? And while incentivizing colleges to keep tuition low sounds like a worthy cause, are there hidden costs or unintended consequences? Will the shift force colleges to trade quality for price?

Guests:

Mark Yudof, president, University of California system

Mark Kantrowitz, publisher of FinAid.org and Fastweb.com; has testified before Congress about student aid on several occasions; member of the board of directors of the National Scholarship Providers Association


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