President Barack Obama unveiled a new plan, which calls for a revamped college ratings system, to make college more affordable.
A rating scorecard, which Obama wants in place by the 2015 school year, would rank universities on factors such as accessibility to lower-income students, cost of tuition, graduation rates and graduates’ debt burden.
One of the goals of Obama’s plan, which he announced Aug. 22, would be to lower university tuition. Obama proposed introducing legislation that would give universities and the Department of Education four years to adjust to the ratings. In 2018, the Department of Education would grant federal financial aid based on the rating system. It would also encourage states to fund public universities based on their ratings, according to a White House news release.
Declining state funding has been a factor in rising tuition for many universities across the country, including MU.
“President Obama is correct when he states that rising tuition is due, in large part, to lack of state support,” MU spokeswoman MaryJo Banken said. “Over the past 12 years, state support has fallen from $193 million to $169 million while costs to maintain buildings, pay utilities, increase technology and improve the educational environment for students have increased.”
Today, tuition makes up 62 percent of MU’s operating budget. Twelve years ago, it was 27 percent, Braken said.
“There has been, over the last 11 years, a decision by the Missouri legislature to consistently and constantly under fund these institutions in favor of tax credits for corporations,” said Mark Jones, Missouri National Education Association political director.
With Missouri considering House Bill 253, a tax-cut bill that could force the UM System to raise tuition, Jones and the association are working to realign the legislature priorities to fully fund universities.
Another step of Obama’s plan is restructuring the way federal aid like Pell grants goes to universities. It would give larger Pell grants to students attending high-ranking colleges, according to the White House news release.
MU is working to increase accessibility to lower-income students by making it easier to transfer from Missouri’s community colleges, and by trying to increase its affordability. MU awarded more than $111 million to students this year before loans, Banken said.
Chancellor Brady Deaton announced that MU will increase scholarships for incoming students in Fall 2014, according to an MU News Bureau news release.
MU awarded more than $111 million to students this year, which does not include loans, Banken said.
“In 2011-2012, 22.3 percent of the student body received Pell grants,” Banken said.
However, while MU has taken steps to maintain accessibility, it does not currently target lower-income students for admission, Nicholas Prewett, director of the Student Financial Aid office.
“The admission status for the university is really need-blind,” Prewett said. “So at the time of application we really don’t know the student’s need status.”
The DOE is also expected to start contacting students who are behind on their debt to try to negotiate payment plans, with the hope of getting borrowers at a monthly payment cap of 10 percent of their monthly income, according to the White House news release.
In an attempt to lower debt by graduating faster, the DOE is also expected to begin requiring those who receive financial aid to progress through percentages of their coursework at a regular rate to continue to receive financial aid, according to the White House news release.
This would be implemented as an incremental process to already existing requirements, which mandate students receiving aid to complete course work within six years for a four-year degree. The average student graduates from MU in four and a half years, and our six-year graduation rate is 70.8 percent, compared to a national average of 58 percent, Prewett said.
MU’s six-year graduation rate is 70.8 percent, compared to a national average of 58 percent according to MU’s website.
MU’s offices of Financial Aid and Financial Success recently launched an exit counseling program to help graduating seniors develop a plan to pay their debt off as quickly as possible.
“Mizzou’s students graduate with an average debt load of less than $20,000. That’s $6,000 less than the national average,” Banken said.
While Obama’s plan seeks to lower tuition and MU continues to work towards accessibility in the face of declining state funding, the end impact on MU will likely remain unknown until the rating system is revealed in 2015, Prewett said.
“While many educators agree that plans like this sound good, the biggest thing is going to be determining what the benchmarks are going to be,” Prewett said.