Making college more accessible—and affordable—for all Americans


In 2010, graduates who took out loans left college owing an average of more than $26,000.

Earning a postsecondary degree or credential is no longer just a pathway to opportunity for a talented few; rather, it is a prerequisite for the growing jobs of the new economy.

Over this decade, employment in jobs requiring education beyond a high school diploma will grow more rapidly than employment in jobs that do not; of the 30 fastest growing occupations, more than half require postsecondary education. With the average earnings of college graduates at a level that is twice as high as that of workers with only a high school diploma, higher education is now the clearest pathway into the middle class.

In higher-education attainment, the U.S. is being outpaced internationally. While the United States ranks ninth in the world in the proportion of young adults enrolled in college, we’ve fallen to 16th in the world in our share of certificates and degrees awarded to adults ages 25-34—lagging behind Korea, Canada, Japan, and other nations.

“Education is not a luxury: It is an economic imperative that every hard-working and responsible student should be able to afford.”

We also suffer from a college attainment gap, as high school graduates from the wealthiest families in our nation are almost certain to continue on to higher education, while just over half of our high school graduates in the poorest quarter of families attend college. And while more than half of college students graduate within six years, the completion rate for low-income students is around 25 percent.

Acknowledging these factors early in my administration, I challenged every American to commit to at least one year of higher education or postsecondary training. I also set a new goal for the country: that by 2020, America would once again have the highest proportion of college graduates in the world.

To achieve this goal, my administration has worked to make college more accessible, affordable, and attainable for all American families.

Helping middle-class families afford college

America is home to the best colleges and universities in the world—yet tuition and fees have skyrocketed over the past decade, making it more difficult for American families to invest in a higher education for their future.

Today’s college students borrow and rack up more debt than ever before. In 2010, graduates who took out loans left college owing an average of more than $26,000. Student loan debt has now surpassed credit card debt for the first time ever.

Our nation’s commitment to placing a good education within reach of all who are willing to work for it helped build a strong American middle class over the past several generations.

In keeping this promise alive, I’ve expanded federal support to help more students afford college, while calling for a shared responsibility in tackling rising college costs. These efforts have produced the largest investment in student aid since the G.I. Bill, while resulting in a more efficient, reliable, and effective system for students to help them afford college and manage debt.

Doubling investments in Pell Grants: We’ve raised the maximum Pell Grant award to $5,635 for the 2013-14 award year—a $905 increase since 2008. Over that same time, the number of Pell Grant recipients has expanded by 50 percent, providing college access to millions of additional low-income and middle-class students across the country. This landmark investment in the Pell Grant was enacted in the Health Care and Education Reconciliation Act of 2010, which ended student loan subsidies for private financial institutions and banks and shifted over $60 billion in savings back to students.

Helping students manage loan debt: The “Pay as You Earn” plan expands income-based repayment to enable 1.6 million students to take advantage of a new option to cap repayment of student loans at 10 percent of monthly income—an option that student borrowers can begin to use at the end of this year. These changes will reduce the burden of student loans in a fiscally responsible way. Additionally, millions of borrowers are now eligible to consolidate Direct Loans and FFEL Loans and save up to half a percentage point on their interest rate.

Expanding education tax credits: My administration established the American Opportunity Tax Credit in 2009 to help families with the costs of college, providing up to $10,000 for four years of college tuition for families earning up to $180,000. Over 9.4 million students and families benefit from the American Opportunity Tax Credit each year. I’ve called on Congress to make this tax credit permanent and prevent it from expiring in 2012.

Keeping student loan interest rates low: Under my leadership, rates on new subsidized Stafford loans remained at 3.4 percent—instead of doubling to 6.8 percent—this past summer. This action saved students an average of $1,000 on the life of their loans, and I’m committed to keeping interest rates low for student loans moving forward.

Keeping costs down

Education is not a luxury: It is an economic imperative that every hard-working and responsible student should be able to afford. The federal government, states, colleges, and universities all have a role to play in making in making higher education more affordable by reining in college costs, providing value for American families, and preparing students with a solid education to succeed in their careers.

Reforming student aid to promote affordability and value: To keep tuition from spiraling too high and drive greater value, I’ve proposed reforms to federal campus-based aid programs to shift aid away from colleges that fail to keep net tuition down and toward those colleges and universities that do their fair share to keep tuition affordable, provide good value, and serve needy students well. These changes in federal aid to campuses will leverage $10 billion annually to help keep tuition down.

Creating a “Race to the Top” competition for college affordability and completion: I’ve proposed incentives for states to maintain their commitments to higher education through a new $1 billion investment. The “Race to the Top: College Affordability and Completion” challenge aims to increase the number of college graduates and contain the cost of tuition by rewarding states that are willing to systematically change their higher-education policies and practices.

Kicking off a “First in the World” competition: I’ve proposed an investment of $55 million in a new “First in the World” competition to support public and private colleges and nonprofit organizations as they work to develop and test the next breakthrough strategy that will boost higher-education attainment and student outcome, while leading to reduced costs.

Strengthening community colleges

I’ve placed a deep emphasis on strengthening America’s community colleges, ensuring they’re gateways to economic prosperity and educational opportunities for millions of Americans each year. Each year, over 1,100 community colleges provide students and workers with critical skills to succeed in a 21st-century economy. To help reach my administration’s college attainment goal, I’ve called for an additional 5 million graduates from community colleges by 2020. Working in partnership with states and municipalities, community colleges are well suited to promote the dual goal of academic and on-the-job preparedness for the next generation of American workers.

Promoting industry partnerships to foster career readiness: The Trade Adjustment Assistance Community College and Career Training program invests in community college and industry partnerships that will give more Americans the skills they need to enter and succeed in the work force. We’ve already committed $1 billion to develop programs that provide pathways for individuals to secure high-quality jobs in high-wage, high-skilled fields, including advanced manufacturing, transportation, health care, and STEM—and we’ll invest an additional $1 billion in this initiative over the next two years. What’s more, the Skills for America’s Future initiative—born out of the first-ever White House Summit on Community Colleges in October 2010—has brought together companies and community colleges to help workers gain new skills and will make America more competitive in the global economy.

Two million jobs for trained workers: In my 2013 budget request, I proposed the Community College to Career Fund, an $8 billion investment in community colleges and states over three years to partner with businesses to train workers in a range of high-growth and in-demand areas, such as health care, logistics, transportation, and advanced manufacturing. I’m committed to working with Congress to enact this initiative and provide more community colleges with the resources they need to become community career centers, where people learn crucial skills and earn industry-recognized credentials to build strong careers.

Improving transparency and accountability

In the interest of transparency and accountability, I’ve tasked my administration with giving students and families new tools and information that will help them make sound financial decisions in pursuing their higher-education goals.

Creating a Financial Aid Shopping Sheet: The Department of Education and the Consumer Financial Protection Bureau have launched the “Know Before You Owe” campaign to create a model financial aid disclosure form—the Financial Aid Shopping Sheet—to help students understand the type and amount of aid they qualify for and easily compare aid packages offered by different schools. This model form is an individualized standard financial aid award letter that will help students and families understand the costs of college before making the final decision on where to enroll. The Shopping Sheet is being voluntarily adopted by colleges and universities across the country for the 2013-14 academic year.

Designing a college scorecard: As part of the “Know Before You Owe” campaign, we’ve also designed a College Scorecard containing key indicators of student success and financial outcomes about every higher-education institution nationwide. This new report card will make it easier for students and families to choose a college that is best suited to their goals, finances, and needs.

Protecting our veterans, military spouses, and their families: My “Executive Order Establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members” provides new protections to help ensure they have the information they need to succeed in higher education. The Principles of Excellence—which will apply to a variety of military and veteran education benefits, including the GI Bill, Tuition Assistance Program, and Military Spouse Career Advancement Account Program—cracks down on improper online recruiting practices, improves support service, provides better data about educational institutions, and strengthens enforcement of student protections. I believe we must do all we can to protect veterans from deceptive practices, and these steps will help ensure that federal military and veteran’s education dollars are well spent.

(Adapted from speeches and text on the White House website.)