Obama’s Higher Ed Plan Prompts Debate

By: - January 30, 2012 12:00 am

In laying out his vision for performance-based funding for colleges and universities last week, President Obama issued a warning to higher education institutions. “If you can’t stop tuition from going up,” Obama said in a speech at the University of Michigan on Friday, “then the funding you get from taxpayers each year will go down.” 

Obama’s plan also includes a “Race to the Top”-similar to his earlier K-12 initiative-that would reward states with bonus funding for results such as limiting the cost of higher education. Plus, he wants a new “report card” on colleges that would present how indebted students are after graduating and how their alumni perform in the job market. The idea is to create incentives for states and their colleges to produce better results for students, while keeping tuition in check. Most of these proposals would require congressional approval.

The New York Times , the Associated Press and the Christian Science Monitor all have rounded up reactions to the plan. Some officials liked the concept. “He’s proposing a form of performance funding for a portion of federal spending, and my view is that, whatever level of funding we’re talking about, that’s the approach we ought to take,” Bill Powers, president of the University of Texas, told the Times . Still, many college officials also were skeptical.

Illinois State University President Al Bowman objected that a focus on controlling costs would risk degrading the quality of higher education. “You could hire mostly part-time, adjunct faculty,” Bowman told the Associated Press . “You could teach in much larger lecture halls, but the things that would allow you achieve the greatest levels of efficiency would dilute the product and would make it something I wouldn’t be willing to be part of.”

University of Washington President Mike Young objected that the plans would punish schools for something out of their control, since state funding plays such a large role in determining tuition costs. “They really should know better,” Young told the Associated Press . “This really is political theater of the worst sort.” 

For his part, Obama also put the blame for rising tuition squarely on states. His hope is that the threat of reduced federal funding would prod states to change their priorities. “Last year, over 40 states cut their higher education spending-40 states cut their higher education budget,” Obama said in his Michigan speech. “And we know that these state budget cuts have been the largest factor in tuition increases at public colleges over the past decade. So we’re challenging states: Take responsibility as well on this issue.”

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Josh Goodman

Josh Goodman helps lead research on fiscal management and place-based economic development programs as part of Pew’s state fiscal health project. Goodman has served as a primary author for Pew studies that examine how states should evaluate tax incentives and maintain budget discipline when implementing those incentives.