Obama Promises 'Aggressive Strategy' For Higher Education

Renee Montagne talks to The Wall Street Journal's David Wessel about a shift in the Obama administration's approach to higher education, which the president alluded to in his economic speech on Wednesday.

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RENEE MONTAGNE, HOST:

And Ari mentioned that the president will be addressing education in this series of speeches. Higher education did come up yesterday as another piece of the economic puzzle. Here's what Obama had to say about the cost of college.

PRESIDENT BARACK OBAMA: Families and taxpayers can't just keep paying more and more and more into an undisciplined system where costs just keep going up and up and up. We'll never have enough loan money. We'll never have enough grant money to keep up with costs that are going up five, six, seven percent a year. We've got to get more out of what we pay for.

MONTAGNE: The president said that in the coming month he plans to layout an, in his words, aggressive strategy to shake up the system and tackle rising costs. For more on what that might mean, we've got The Wall Street Journal's David Wessel on the line. He's been looking into the economics of higher education. Good morning.

DAVID WESSEL: Good morning, Renee.

MONTAGNE: The cost of rising tuition is more and more of concern. We've been doing lots of stories about it, as a matter of fact. What has the federal government been doing about it so far?

WESSEL: Well, basically what the federal government strategy has been is to spend more money on Pell Grants, tuition tax breaks and various loan programs. And those loan programs have been getting a lot of attention, of course, because students have borrowed about a trillion dollars and because the interest rate on some of those loans is about to soar, double actually, unless Congress acts. The Senate voted Wednesday to limit that.

That bill now goes to the House. I think what the president is saying here is this whole approach isn't working. Simply putting more money into students' hands isn't the right answer. His aides tell me that he's particularly frustrated that during his presidency federal student aid has gone up by $20 billion, but cash-strapped states have cut their aid to higher education by about $10 billion.

MONTAGNE: Well, the president used an interesting phrase about colleges - undisciplined. So if what they've been doing with grants and whatnot is not working, what levers does the president have?

WESSEL: Well, I think what he's talking about is some carrot and some stick. He'd like to put some conditions on the federal student aid to push colleges to change their ways, to maybe use technology more, maybe think about a three-year Bachelor's degree, maybe to start measuring their performance by how many people graduate, just by(ph) how many people are sitting in seats.

I mean the Education Department's done a little of that. They've ran into some court trouble. And on the carrot side, his budget proposes some extra money, a race for the top for higher ed that would encourage states and private colleges to innovate. And the Senate Appropriations Committee actually has set aside a little bit of money for that.

The House so far has turned them down.

MONTAGNE: And the president talked about shaking up higher education, but what you described sounds pretty modest, honestly. What else is he talking about?

WESSEL: Well, what's interesting to me is that more and more in Washington you hear people drawing an analogy between higher education and healthcare. I mean there are a lot of differences, of course, but in both of them the federal government's putting in a lot of money, and in education, as it once did in healthcare, it's paying for more classroom hours but not necessarily for more education or more useful education.

So the president is talking about other ways to get colleges to basically pay them for performance. One way, as we've done in healthcare, is to make them publish a lot more data about what happens to graduates - how many finish, what do they earn a few years out. This is something that the colleges say is not a good idea, but eventually you can see us moving in this direction. The federal government's done a little of this already.

The other is he's targeting a very archaic accreditation system, kind of a public/private arrangement that determines which institutions are eligible for federal aid and which are not. In the president's view, this is creating barriers to change and to the use of technology, that if the barriers were eroded could make higher education cheaper and more widely available, more online courses offered by nontraditional institutions, for instance.

MONTAGNE: Well, does the president, lastly, have much of a chance of getting this done?

WESSEL: Well, I think any congressional approval for these things is a long shot, although there is some Republican support. Marco Rubio, for instance, is co-sponsoring a bill to make the colleges put out a lot more data. But the president does have some administrative authority and he's talking about using it, and I think as we saw in his speech this week, he's going to use the bully pulpit and that's bound to have some impact on colleges and universities that kind of want to get ahead of this curve and are getting beat up all the time.

MONTAGNE: Thanks very much. That's the Wall Street Journal's economics editor, David Wessel. It's MORNING EDITION from NPR News.

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