Obama: Colleges on notice not to jack up tuition

ANN ARBOR, Mich. (DETROIT FREE PRESS) - President Barack Obama this morning told thousands of college students at the University of Michigan that their college education is an investment in their future.

"College is the single most important investment you can make in your future," he told the crowd at Glick Fieldhouse. "And I'm proud that all of you are making that investment."

He said, "Michigan is all about making stuff. If there's anybody that can teach us about manufacturing it's the great state of Michigan."

"We placed our bets in the American auto industry, and today the American auto industry is back," he said, echoing a line from his State of the Union speech on Tuesday.

He said, "I don't want to live in a country where we're looking at success for only a small group of people, but where everybody has a chance."

He said Congress needs to double the number of work-study jobs in the next five years and increase student aid.

He said colleges and universities need to keep costs down. "We are putting colleges on notice: You can't assume that you'll just jack up tuition every single year," he said. "We should push colleges to do better. We should hold them accountable if they don't."

Powerful incentives to invest in education
Speaking this morning before Obama's address, U.S. Secretary of Education Arne Duncan laid out the outlines of the president's speech. He said the federal government will offer states powerful incentives to invest in higher education.

Duncan said the federal government will also work aggressively to get universities to "hold down tuition."

"If all three partners (federal government, state government and the universities) come together, great things are going to happen."

Obama would propose in his speech that the federal government will change the way it provides aid to colleges.

"The campus-based aid that the federal government provides to colleges through Supplemental Educational Opportunity Grants (SEOG), Perkins Loans, and Work Study is distributed under an antiquated formula that rewards colleges for longevity in the program and provides no incentive to keep tuition costs low," the White House said in a news briefing statement. "The President is proposing to change how those funds are distributed by implementing an improved formula that shifts aid from schools with rising tuition to those acting responsibly, focused on setting responsible tuition policy, providing good value in education, and ensuring that higher numbers of low-income students complete their education.

"He is also proposing to increase the amount of campus-based aid to $10 billion annually. The increase is primarily driven by an expansion of loans in the federal Perkins program - which comes at no additional taxpayer cost.

"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.

"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."

The federal government will also create a "college scorecard" to show parents and students key details about colleges and universities.

While many students came to the Al Glick Fieldhouse for the chance to see a sitting president up close and support his reelection bid, they also appreciated his message.

Katie Taylor graduated from U-M in 2008 with a master's degree in social work. Even with federal grants and scholarships, as an out-of-state student from North Carolina, she ended her college years having amassed $150,000 in debt.

So the 30-year-old Ypsilanti resident appreciates the efforts Obama is making to ensure that parents and students really understand how much college is going to cost.

"I think I would have planned differently," she said in retrospect. "And maybe, I would have paid off some of the loans before getting my doctorate."

She thinks the federal incentives Obama proposed for universities that keep their tuition rates down are "reasonable."

But for Ella Weber, 19, of East Lansing, she fears the trickle down effect could result in the University of Michigan not being able to provide as much financial aid as students need.

"I have a lot of student loans and I would have like to hear more about where he's going to get the money for these programs," said Weber, a sophomore majoring in history and anthropology. "It's pretty scary, but the university here does a pretty good job of offering grants and aid. This might end up being more of a financial burden on all students.

Duncan and Obama are in Michigan touting this new higher education. The state of Michigan has cut its higher education funding significantly over the last decade, including by 15% this year.

"We're challenging every state to maintain their funding. But nobody gets a pass. We are challenging universities to hold the line on tuition costs.

"We are proposing a significant increase in Pell Grants to help access to universities."

Duncan said holding the line for tuition increases by universities means not raising tuition over the pace of inflation. Most of Michigan's universities have not matched that in recent years, but have said they have to raise tuition to make up for cuts in state aid.

State legislators have said they have had their hands tied by the slumping economy.

But Duncan wasn't buying that as an excuse.

"Budgets are about more than money. Budgets reflect our values. We have to improve our education systems. We have to educate our way to a better economy."

Mackenzie Huron, 19, of Grand Rapids, uses a combination of federal grants and out-of-pocket cash she earns as a nurses aid for her pre-med studies at the University of Michigan.

"I stress about money a lot," she said. "I don't have too many loans yet, but I know I'm going to be in a lot of debt when I get out of med school."

Alexis Funston, 19, of Los Angeles, Calif., has the double whammy of paying out-of-state tuition and the fear that the federal government will take away some grant money from the University of Michigan if it doesn't keep tuition rates down.

"I have $17,000 in Pell grants," said Funston, a pre-law major. "So if those get cut, that would really suck. I would have to leave and go to an in-state college in California.

Republican presidential candidate Mitt Romney, who was born and raised in Michigan, released a letter to Obama this morning, calling his policies flawed and failed.

"If you have brought new ideas to Michigan for creating jobs, why have you waited three years to unveil them?" Romney asked.

"What you are offering Michigan now is too little, too late. What Michigan needs, and what the country needs, is not four more years of economic mismanagement and failed leadership, but a fundamental change in direction," Romney added. "I was born and raised in Michigan at a time when our state was the pride of America. With new leadership, Michigan can feel that pride once more."

Contact David Jesse: 313-222-8851 or djesse@freepress.com. Staff writer Kathleen Gray contributed to this report.

From the Associated Press