ROBERT SIEGEL, HOST:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, HOST:

I'm Melissa Block.

And we begin this hour in the classroom. In the State of the Union address, President Obama outlined a number of proposals to improve American education. In a moment, fighting the dropout rate.

But first, President Obama announced to push to increase federal support for college students and to pressure schools to keep tuition low.

As NPR's Larry Abramson reports, higher education officials are skeptical.

LARRY ABRAMSON, BYLINE: It's not hard to persuade students at a big state university that government should do more to keep tuition cost down. And President Obama found a receptive audience at the University of Michigan today for the idea that state budget cuts threatened access to public schools.

PRESIDENT BARACK OBAMA: We know that these state budget cuts have been the largest factor in tuition increases at public colleges over the past decade.

ABRAMSON: To reverse that trend, the White House wants to increase a number of programs, grants, work study and the Perkins Loan program. And he wants to do it in a targeted way, giving more of those benefits to states and schools that keep tuition down and ensure students' success. Raise tuition too much and you risk getting fewer federal dollars.

OBAMA: We're telling the states, if you can find new ways to bring down the cost of college and make it easier for more students to graduate, we'll help you do it.

ABRAMSON: Sounds expensive, right? Well, Mark Kantrowitz, publisher of Finaid.org says it doesn't have to be.

MARK KANTROWITZ: Extending the Perkins Loan program from about $1 billion a year to $8 billion a year is actually profitable to the federal government.

ABRAMSON: Because the money gets paid back with interest. But Kantrowitz says this idea probably will never generate enough cash to pay for all the other ideas, doubling the number of work study jobs and preventing an increase in the interest rate on student loans. You can expect to see duels with Congress over the actual cost of these ideas. Kantrowitz questions whether it makes sense to expand these college aid funds while Congress is already trimming the most important program for low income students, Pell Grants.

KANTROWITZ: In particular, Congress reduced the income threshold at which a student receives a full Pell Grant from $32,000 to $23,000.

ABRAMSON: Kantrowitz says that cut could force some students to drop out. Colleges and universities say they want to cut costs, but they do not want Washington deciding which schools are sincere about holding tuition down. Terry Hartle of the American Council on Education says how will the government decide whom to blame for tuition increases?

TERRY HARTLE: In 40 of the 50 states, public colleges and universities don't set their own tuition set by the legislature, set by state governing boards and other actors.

ABRAMSON: Hartle says, for example, it would not make sense to punish California universities for recent tuition hikes. These schools are already suffering from massive state cutbacks. The president did get credit for raising the profile of tuition problems. Richard Vedder is with the Center for College Affordability and Productivity.

RICHARD VEDDER: He is at least recognizing the need to increase the negative consequences to schools for continuing to raise their tuition.

ABRAMSON: But at the same time, Vedder says the proposal to increase student aid will defeat the whole purpose.

VEDDER: It makes it easier for people to borrow money, which increases the demand for schooling and pushes up tuition.

ABRAMSON: Still, many student groups welcomed the fact that the president is keeping education front and center as his re-election campaign gets underway. They also applauded a plan to create a college scorecard meant to help families figure out the true cost of going to college.

Larry Abramson, NPR News.

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