“Colleges that can show that they are providing students with good long-term value will be rewarded with additional dollars to help students attend. Those that show poor value, or who don’t act responsibly in setting tuition, will receive less federal campus-based aid,” the White House said. “Students will receive the greatest government grant and loan support at colleges where they are likely to be best served, and little or no campus aid will flow to colleges that fail to meet affordability and value standards.” What those “value standards” are still remains to be seen.

Obama also wants to create a “Race to the Top” competition in higher education, similar to the one his administration has used to spur K-12 reforms, to encourage states to better use higher-education dollars in exchange for $1 billion in prize dollars. A second, $55 million competition called “First in the World” would encourage innovation to boost productivity on campuses. It would make grants to individual colleges and universities for projects such as course redesign through the improved use of technology, early college-prep activities to lessen the need for remediation, competency-based approaches to gaining college credit, and other ideas aimed at making higher education more efficient and affordable.

“We have to educate our way to a better economy,” Duncan told MSNBC.

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

His administration will create a new “College Scorecard” for all degree-granting institutions, designed to provide information about college costs, graduation rates, and potential earnings—making it easier for students to choose a college that is best suited to their needs, goals, and price range. It also will create an updated version of the “Financial Aid Shopping Sheet,” announced in October, a required template for all colleges that would make it easier for families to compare college financial aid packages. Obama also wants to begin collecting earnings and employment information for colleges, so that students can have a better sense of the post post-graduation outcomes they can expect.

His plan will likely be a tough sell in Congress, which must approve nearly all aspects of it except the creation of the new tools.

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 other proposals to make college more affordable in his State of the Union address, such as extending a tuition tax break and asking Congress to keep loan interest rates from doubling on July.

His administration also has 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.


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