Romney says the government should spend less on higher education.
President Barack Obama would make tax credits for college expenses permanent and expand Pell grants for students from lower-earning families. The Republican team of Mitt Romney and Paul Ryan would emphasize the need to curb rising tuitions and federal education spending that are burdening families and the government.
The different approaches to coping with growing college costs highlight one way that Obama and the GOP ticket are competing for young voters. This important group leaned heavily toward Obama in 2008 and still prefers him, according to polls, though less decisively.
Tuitions and fees for four-year public colleges grew by 72 percent above inflation over the past decade, averaging $8,244 last year, according to the College Board, which represents more than 6,000 schools.
Student loan debt in the U.S. has hit $914 billion; the average borrower owes more than $24,000, the Federal Reserve Bank of New York says.
Democrats are sure to reach for the college vote at the party’s national convention in Charlotte, N.C., a week after Obama spoke to students in university towns in Virginia, Colorado and Iowa. Romney was counting on his youngest son, Craig, and the 42-year-old Ryan to court young supporters.
In 2008, voters age 18 to 24 sided with Obama over GOP candidate John McCain by a 66-32 margin. A Gallup poll taken in July and August found that same age group preferring Obama over Romney by 56 percent to 36 percent, an edge that Republicans would love to erode further.
Well before the party conventions, both sides had issued proposals directly affecting college students—and their parents—coping with those mushrooming costs.
Obama would let the current $5,550 per year maximum Pell grant increase to $5,635 next year, as scheduled under current law. That figure has grown by more than $900 since 2008 for a program that is the largest source of federal aid for students, serving more than 9 million of them.
Obama would make permanent the American Opportunity tax credit, created as part of his 2009 economic stimulus program. The credit provides up to $2,500 a year per student for college costs but is due to expire Jan. 1. Renewing it would cost an estimated $13 billion next year alone.
Obama has also proposed tying some federal aid, including Perkins loans and subsidies for students’ work-study jobs, to schools’ abilities to curb tuition increases. The president’s proposals continue “the administration’s commitment to keep college affordable for students and their families,” his 2013 budget blueprint said.
Separate plans by presidential nominee Romney and his running mate focus more on containing federal costs.
In a May paper, Romney argued that even as federal spending for higher education has grown, the costs of attending college and student debt have ballooned. Obama initiatives making the government the direct source of federal student loans, creating the American Opportunity tax credit and boosting Pell grants have not worked, it said.
“Flooding colleges with federal dollars only serves to drive tuition higher,” said Romney’s education paper, “A Chance for Every Child.”
It said Romney would improve college access and affordability: “A Romney administration will tackle this challenge by making clear that the federal government will no longer write a blank check to universities to reward their tuition increases.”
Romney would eliminate duplicative federal college financial aid programs, direct Pell grants to “students that need them most” and put the program on a sustainable long-term path, the document said. It provides few details.
He would put private lenders back in the business of issuing federally backed student loans, let companies compile data about lending and colleges for consumers and help families save for higher education. The paper says little about how.
Campaigning in March, Romney was asked by a voter what he would do to make college more affordable. Romney replied that while it might be popular for him to answer that he would provide students with government money, “what I’m going to tell you is shop around.”
Ryan, the Wisconsin Republican who is chairman of the House Budget Committee, wrote a House-approved 2013 budget that would let the American Opportunity tax credit expire in January.
It would freeze the maximum Pell grant at $5,500 for the next decade and it suggests rolling back some subsidies for student borrowers and recent provisions making the grants more widely available.
Ryan’s budget says the Pell grant program, currently costing about $36 billion a year, is unsustainable.
“Urgent reforms are necessary to enable the program to continue as the foundation of the nation’s commitment to helping low-income students gain access to higher education,” budget documents say.
Obama also proposed keeping interest rates at 3.4 percent for subsidized Stafford loans for undergraduates. After initial Republican hesitation, Romney endorsed the idea and Congress eventually approved it. Ryan’s budget would have let the rates double to 6.8 percent, as was scheduled under previous law.