College Debt

On August 22, 2013, President Obama outlined a plan to increase college affordability options, particularly for the middle class. Overall, I’m in favor and the plan itself is a laudable start to addressing issues in college affordability. Between the lines one can envision an environment that encourages savvy student-consumers and a more cohesive network of institutions, payors and employers. Like most initiatives (and rosy-painted pictures, for that matter), collaboration from these aforementioned players will be necessary to create lasting success; specifically:

  • Cooperation/increased capacity from higher ed to provide/start to assess the information needed compile the proposed new college ratings
  • Recognition of prior learning and tech-based offerings by employers during hiring decisions
  • Cooperation from the financial sector in private student loans, as restricted private credit for students is also a factor in college affordability.

I’ve highlighted some of the major initiatives below.  (If you’d like some more or alternative thoughts, please see articles in US News and World Report,  The Chronicle of Higher Education, USA Today and feel free to suggest more in the comments below.)

Through the plan, the administration intends to address college affordability with three general areas:

  • Paying for College Performance
  • Promoting Innovation and Competition
  • Ensuring Student Debt is Affordable

Pay for Performance

Pay for Performance

Pay-for-Performance measures tend to raise concern within the educational sector.  Such initiatives have been successful in other countries, particularly in the United Kingdom. In the U.S. however, pay-for-performance efforts in higher education have historically faced heavy backlash, though interest in tying funding to return on investment has gained traction among state governments.   Many state measures are promising; Tennessee offers funding for accomplishing metrics such as credit/degree completion for low-income and adult students.  Other provisions in the plan will have to drive colleges to provide the effective support students need to succeed, rather than tipping the scale by restricting admission to those they consider most likely to finish school quickly in the first place.

New Ratings System

The College Affordability Plan would also establish a new, more robust ratings system to report on college performance to help parents and students make informed decisions on which college to choose. The ratings system would include data on access, tuition affordability and retention graduation rates, to be included on The White House College Scorecard.

Promote Innovation and Competition

The Innovation and Competition area of the College Affordability Plan outlined a few areas of interest specifically to folks in the OER and blended learning spheres.

A Shift Away from the Credit-Hour

Awarding credits based on learning outcomes and competencies may be the death knell for the century-old credit-hour. Change seems to be in the air for recognizing outcome-based learning, though there will continue to be a debate surrounding the credit-hour as the “currency” of higher education.

Endorsement of Online/Tech-based Learning

Endorsement of online and tech-based institutions such as Western Governors University, Carnegie Mellon University’s Open Learning Initiative, and Southern New Hampshire University is a huge step toward acceptance of degree programs that serve adult learners. What may be missing is an effort to help/encourage employers recognize these institutions as well.

Recognition of Prior Learning/ Encouraging Access to Dual-enrollment Programs

With about a third of college students transferring at least once before graduating, encouraging colleges to be more supportive of transfer students by accepting previous credit is essential.  Assisting the transfer student population will go a long way toward improving college completion rates. Dual enrollment programs may help the conversation along, however credit acceptance agreements are usually limited in scope and disparities in access to such programs are documented.

Ensuring Student Debt is Affordable

Let’s talk turkey.  With the average student debt by graduation at $26,000 per pupil in the United States, student loan debt will continue to be a priority issue in education and economics. The College Affordability Plan would expand Pay-As-You-Earn to invite students who borrowed before 2008 or after 2011 to cap loan repayments at 10 percent of monthly income. The Department of Education and Department of Treasury would partner to recruit borrowers who have a large debt load to participate.

Talk to us!
• What does college affordability mean to you?
• What should success look like?
• How does the U.S. conversation on higher education costs compare to the debates (or lack thereof) in your country?

Photo Credit: Nastassia Davis [] via photopin CC BY NC ND 2.0

One thought on “Opinion: A Plan to Increase College Afforability

  1. In England and Wales (different rules apply in Scotland due to devolved powers and decisions of the Scottish Parliament) the trend in the last couple of decades has been to move the cost of university education from central funding (ie through tax-funded government grants) to the individual student. The rationale is that graduates, on average, have higher lifetime earnings so should pay in full for their education. The current fees are ‘up to’ £9,000 per annum so around £27,000 for a standard three year course (that’s about $42k at today’s rates). When the last fee changes were introduced the standard was supposed to be £6k, ‘exceptionally’ up to £9. In practice most universities seem to consider themselves exceptional and few charge less than the maximum. There doesn’t seem to be any competition on price and I’ve seen no evidence among my own students that this is seen as a significant factor when making choices.

    In practice, students on first-degree (ie undergraduate/Bachelors) courses can fund their tuition fees via a government backed loan scheme. This is a low interest, long term, income-contingent loan which actually acts rather like a graduate tax. The loan does not become repayable until the graduate (or rather, borrower, as the loan is still repayable in the event of failing to graduate) reaches an income close to the national average. Once payments start they are taken at a rate of 10% of income above the threshold. Any balance outstanding at retirement is written off.

    Unlike the US experience, very few students transfer during their courses. Although there is a standardised points structure, there is little incentive for universities to make courses compatible with each other so transfer can be problematic. I’m guessing that the figures quoted above include those transferring from 2- to 4-year colleges? This distinction does not exist in the UK system.

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